Isle of Capri Casinos, Inc. Announces Fiscal 2009 Fourth Quarter and Year End Results

11 June 2009

ST. LOUIS, June 10 /PRNewswire-FirstCall/ -- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) (the "Company") today reported financial results for the fourth quarter and fiscal year (the "FY") ended April 26, 2009, and other Company-related news.

FY 2009 Highlights

The Company pointed to a series of accomplishments during FY 2009 that significantly impacted the Company's operations and financial results. Specifically, the Company:

    --  Streamlined operations resulting in decreased on-going property        operating costs of approximately $45 million compared to FY 2008, and        decreased on-going corporate and development costs by an additional $7.3        million compared to FY 2008;    --  Stabilized operating results despite a $50 million net revenue decline        caused by economic conditions;    --  Completed a $142.7 million cash tender offer for the Company's debt        and settled the remaining insurance claims related to Hurricane Katrina        for $95 million, together leading to improved financial flexibility;    --  Neared completion of the Company's first two Lady Luck-branded        properties;    --  Continued significant improvements in guest experience and customer        courtesy measures across the portfolio; and    --  Focused on improved results through domestic operations by exiting the        Coventry, UK operation and announcing plans to exit the Grand Bahama        gaming market.

In making the announcement, James B. Perry, the Company's executive vice chairman and chief executive officer, said, "This past fiscal year marked a period of great accomplishment in the transformation of Isle of Capri. As we continue to focus on increasing cash flow at our domestic locations by deploying our significant operational expertise, we have begun realizing the substantial effects of our margin improvement programs. Specifically, we have been successful in stabilizing our margins and profitability despite the challenging marketplace because, I believe, we have remained focused on exceeding customer expectations while improving our cost structure. In addition, I am proud we have been successful in our efforts to find avenues to exit our international operations.

"While we have seen signs of improvement since the start of the calendar year, we will continue to employ a cautious approach to our business as a result of economic uncertainty. Importantly, I believe our success in creating a solid operating company at Isle of Capri has positioned our team to pursue potential new acquisition and management opportunities that stand to diversify and increase our free cash flow while improving our overall capital position."

Consolidated Results

The following table outlines the Company's financial results (dollars in millions, except per share data, unaudited):

                                Three Months Ended        Fiscal Year Ended                              April 26,      April 27,  April 26,  April 27,                                 2009           2008       2009       2008    Net revenues, excluding     insurance recoveries      $284.3         $292.6   $1,055.7   $1,107.3    Net revenues                287.2          292.6    1,118.6    1,107.7    Income (loss) from     continuing operations       24.8           (6.0)      59.4      (38.1)    Net income (loss)            14.6          (51.3)      43.6      (96.9)    Income (loss) per share     from continuing     operations                  0.78          (0.20)      1.89      (1.24)    Net income (loss) per     share                       0.46          (1.66)      1.39      (3.16)

Quarter

Before the impact of the items reflected in the table below, EBITDA for the fourth quarter of FY 2009 was $57.9 million compared to $54.1 million for the fourth quarter of FY 2008.

The Company's income from continuing operations for the fourth quarter of FY 2009 of $24.8 million or $0.78 per share contains pretax items impacting EBITDA and Income from continuing operations as detailed in the table below having the combined impact of increasing our earnings per share from continuing operations by $0.62 per share.

The Company's (Loss) from continuing operations for the fourth quarter of FY 2008 of ($6.0) million or ($0.20) per share contains pretax items impacting EBITDA and (Loss) from continuing operations as detailed in the table below having the combined impact of increasing our (loss) per share from continuing operations by ($0.03) per share.

Fiscal Year

Before the impact of the items reflected in the table below, EBITDA for FY 2009 was $196.9 million compared to $201.3 million for FY 2008.

The Company's income from continuing operations for FY 2009 of $59.4 million or $1.89 per share contains pretax items impacting EBITDA and Income from continuing operations as detailed in the table below having the combined impact of increasing our earnings per share from continuing operations by $2.19 per share.

The Company's (Loss) from continuing operations for FY 2008 of ($38.1) million or ($1.24) per share contains pretax items impacting EBITDA and (Loss) from continuing operations as detailed in the table below having the combined impact of increasing our (loss) per share from continuing operations by ($0.62) per share.

Items Impacting EBITDA and Income (loss) from Continuing Operations

Significant items impacting EBITDA and the Income (loss) from continuing operations during the fiscal quarters and years ended April 26, 2009 and April 27, 2008 are as follows:

                                Three Months Ended       Fiscal Year Ended                               April 26,  April 27, April 26,   April 27,                                 2009       2008      2009        2008    Items impacting     EBITDA and Net     income (loss):         Insurance recoveries,          net                    $3.0         $-    $93.3        $2.1         Valuation charges      (30.1)         -    (36.1)       (6.5)         Pre-opening                -          -        -        (3.6)         Other                    2.3          -        -           -         Minority interest          -          -        -        (4.9)    Additional item     impacting Income     (loss) from continuing      operations:         Gain (loss) on          early extinguishment          of debt                57.7       (1.6)    57.7       (15.3)

After consideration of the items reflected in the table above, EBITDA was $33.2 million and $54.1 million for the fourth quarters ended FY 2009 and FY 2008, respectively.

After consideration of the items reflected in the table above, EBITDA was $254.1 million and $188.4 million for the years ended FY 2009 and FY 2008, respectively.

Discussion

Discussing the year end results, Virginia McDowell, the Company's president and chief operating officer, remarked, "We focused our efforts during the fiscal year primarily on continuing to implement our core operating principles designed to improve the customer experience while simultaneously right-sizing our business to reflect the current economic realities. As a result, we have been able to stabilize our profitability despite a substantial decline in revenue while improving our customer courtesy scores and maintaining or gaining market share in the majority of our competitive markets. Perhaps most encouraging is that we have been able to maintain the cost structure we implemented through right-sizing our business, which leads to higher flow-through on any additional revenue. Additionally, we believe we have opportunity for improved operating results in Missouri and Colorado as a result of regulatory changes, as well as the pending changes in Florida.

"The impact of the economic pressure has been felt broadly across our customer base. We experienced a significant decline in our retail play along with a decrease in the trip frequency and spend of our database customers late in calendar 2008. While January and February saw a somewhat substantial increase across both of these customer groups, we did see a moderate pull-back in spending during March and April. Moving forward, we expect the trends from March and April to continue, with our database customers having increased trip frequency, but with lower average spend and lower retail visitation. We believe this will remain substantially unchanged until the economy improves and we see improvement in consumer confidence.

"We are excited to have nearly completed our first two Lady Luck properties in Caruthersville and Marquette, and are encouraged by the customer response we are receiving from these newly revamped facilities focused on a clean, safe, friendly and fun entertainment experience. Looking forward, once we have more clarity regarding the economy and our own financial position, we have identified and prioritized approximately $60 million in capital projects which we expect to deploy over the next 24 to 36 months. We plan to focus these capital improvements primarily on refreshing our hotel room inventory, as well as on capital improvements to our properties in Lake Charles and Black Hawk. Additional capital investments at other properties would be dependent on improving economic and local market conditions."

Commenting on the Company's capital structure and strategy, senior vice president and chief financial officer, Dale R. Black said, "We have been successful in improving our capital structure during the past 18 months and will continue to look for ways to improve the capital structure going forward. While our improved balance sheet has given us additional flexibility to consider strategic investments in our existing properties and potential acquisitions, we remain committed to investing only in projects that we believe will further improve our balance sheet and will enable us to increase our cash flow. Overall, our objective is to be under five-times leverage within the next 24 months."

Discontinued Operations

During the fourth quarter of FY 2009, we reclassified the historical results of our UK operations previously presented as continuing operations to discontinued operations. Included in discontinued operations are pretax losses related to the sale of our Coventry casino assets and lease termination costs totaling $12.0 million and the pretax write-down of Blue Chip assets held for sale of $1.4 million.

Capital Structure and 2010 Guidance

As of April 26, 2009, the Company had $96.7 million in cash and cash equivalents and total debt of $1.3 billion. Capital expenditures for FY 2009 totaled $58.6 million which included approximately $30 million of maintenance capital expenditures.

The Company provided guidance for the following specific items for fiscal year 2010:

    --  Depreciation expense is expected to be approximately $115 million;    --  The Company expects cash income taxes pertaining to FY 2010 operations        to be less than $10 million which would primarily represent state income        taxes.    --  Interest expense is expected to be approximately $75 million to $80        million, net of capitalized interest.    --  Total Corporate expenses for FY 2010 are expected to be approximately        $40 million including approximately $7 million in noncash stock        compensation expense.    --  Maintenance capital expenditures for FY 2010 are expected to be        approximately $40 million.

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Wednesday, June 10, 2009 at 9:00 am Central Time during which management will discuss the financial and other matters addressed in this press release. The conference call can be accessed by interested parties via webcast through the investor relations page of the Company's website, www.islecorp.com, or, for domestic callers, by dialing (800) 510-9836. International callers can access the conference call by dialing (617) 614-3670. The conference call access code is 89173731.

This conference call will be recorded and available for review starting at noon central on Wednesday, June 10, 2009, until midnight central on Wednesday, June 17, 2009, by dialing (888) 286-8010 for domestic callers or (617) 801-6888 for International callers. The access code will be 51751350.

                            ISLE OF CAPRI CASINOS, INC.                      CONSOLIDATED STATEMENTS OF OPERATIONS                  (In thousands, except share and per share data)                                  (Unaudited)                               Three Months Ended       Fiscal Year Ended                             April 26,      April 27,  April 26,   April 27,                                2009          2008       2009        2008    Revenues:      Casino                  $288,342     $292,075  $1,066,162  $1,107,246      Rooms                     10,684       11,903      46,380      49,498      Pari-mutuel, food,       beverage and other       37,843       40,318     139,957     151,530      Hurricane insurance       recoveries                2,932            -      62,932         348        Gross revenues         339,801      344,296   1,315,431   1,308,622          Less promotional           allowances          (52,582)     (51,672)   (196,789)   (200,932)            Net revenues       287,219      292,624   1,118,642   1,107,690    Operating expenses:      Casino                    40,092       39,326     154,538     154,263      Gaming taxes              73,430       76,714     270,882     286,746      Rooms                      2,969        3,179      12,175      12,031      Pari-mutuel, food,       beverage and other       14,844       16,440      53,143      58,676      Marine and facilities     16,370       17,496      65,504      66,656      Marketing and       administrative           67,559       71,403     263,164     279,009      Corporate and development  8,761       13,980      41,331      48,619      Valuation charges         30,125            -      36,125       6,526      Hurricane and other       insurance recoveries, net   (98)           -     (32,277)     (1,757)      Pre-opening                    -            -           -       3,654      Depreciation and       amortization             30,105       33,246     122,457     128,944        Total operating         expenses              284,157      271,784     987,042   1,043,367    Operating income             3,062       20,840     131,600      64,323      Interest expense         (19,544)     (25,906)    (92,065)   (106,826)      Interest income              491          548       2,112       3,293      Gain (loss) on early       extinguishment of debt   57,693       (1,614)     57,693     (15,274)    Income (loss) from     continuing operations     before income taxes     and minority interest      41,702       (6,132)     99,340     (54,484)      Income tax benefit       (provision)             (16,918)         116     (39,942)     21,288      Minority interest              -            -           -      (4,868)    Income (loss) from     continuing operations      24,784       (6,016)     59,398     (38,064)    (Loss) from discontinued     operations, net of income     tax benefit               (10,196)     (45,259)    (15,823)    (58,810)    Net income (loss)          $14,588     $(51,275)    $43,575    $(96,874)    Earnings (loss) per     common share basic:      Income (loss) from       continuing operations     $0.78       $(0.20)      $1.89      $(1.24)      (Loss) from discontinued       operations, net of income       taxes                     (0.32)       (1.46)      (0.50)      (1.92)      Net income (loss)          $0.46       $(1.66)      $1.39      $(3.16)    Earnings (loss) per common     share diluted:      Income (loss) from       continuing operations     $0.78       $(0.20)      $1.89      $(1.24)      (Loss) from discontinued       operations, net of income       taxes                     (0.32)       (1.46)      (0.50)      (1.92)      Net income (loss)          $0.46       $(1.66)      $1.39      $(3.16)    Weighted average basic     shares                 31,770,653   30,845,436  31,372,670  30,699,457    Weighted average diluted     shares                 31,770,653   30,845,436  31,379,016  30,699,457

                                ISLE OF CAPRI CASINOS, INC.                                CONSOLIDATED BALANCE SHEETS                    (In thousands, except share and per share amounts)                                                     April 26,      April 27,                                                       2009            2008                              ASSETS    Current assets:     Cash and cash equivalents                       $96,654         $91,790     Marketable securities                            17,548          18,533     Accounts receivable, net of allowance for      doubtful accounts of $5,106 and      $4,258, respectively                            10,421          12,195     Income taxes receivable                           7,744          28,663     Deferred income taxes                            16,295          12,606     Prepaid expenses and other assets                23,234          27,905     Insurance receivable                              1,514           7,689     Assets held for sale                              4,183               -       Total current assets                          177,593         199,381    Property and equipment, net                    1,177,540       1,328,986    Other assets:     Goodwill                                        313,136         307,649     Other intangible assets, net                     83,588          89,252     Deferred financing costs, net                     9,314          13,381     Restricted cash                                   2,774           4,802     Prepaid deposits and other                       18,717          22,948     Deferred income taxes                                 -           7,767       Total assets                               $1,782,662      $1,974,166        LIABILITIES AND STOCKHOLDERS' EQUITY    Current liabilities:     Current maturities of long-term debt             $9,688          $9,698     Accounts payable                                 16,246          29,283    Accrued liabilities:     Payroll and related                              47,209          47,618     Property and other taxes                         31,487          30,137     Progressive jackpots and slot club awards        13,647          13,768     Interest                                          9,280           8,580     Other                                            38,548          44,353     Liabilities related to assets held for sale       1,888               -       Total current liabilities                     167,993         183,437    Long-term debt, less current maturities        1,291,384       1,497,591    Deferred income taxes                             24,970               -    Other accrued liabilities                         52,575          52,821    Other long-term liabilities                       17,314          52,305    Stockholders' equity:     Preferred stock, $.01 par value; 2,000,000      shares authorized; none issued                       -               -     Common stock, $.01 par value; 45,000,000      shares authorized; shares issued:      36,111,089 at April 26, 2009 and 35,229,006      at April 27, 2008                                  361             353     Class B common stock, $.01 par value;      3,000,000 shares authorized; none issued             -               -     Additional paid-in capital                      193,827         188,036     Retained earnings                               101,828          58,253     Accumulated other comprehensive (loss)      income                                         (15,191)         (5,601)                                                     280,825         241,041    Treasury stock, 4,340,436 shares at April 26,     2009 and 4,372,073 shares at April 27, 2008     (52,399)        (53,029)     Total stockholders' equity                      228,426         188,012     Total liabilities and stockholders' equity   $1,782,662      $1,974,166

                           Isle of Capri Casinos, Inc.                      Supplemental Data - Net Revenues (1) (2)                            (unaudited, in thousands)                                Three Months Ended       Fiscal Year                               April 26,   April 27,  April 26, April 27,                                 2009        2008       2009      2008    Mississippi      Biloxi                   $21,786    $22,742    $83,519    $90,586      Natchez                   10,043      8,587     35,936     35,707      Lula                      20,328     19,876     70,987     75,399      Mississippi Total         52,157     51,205    190,442    201,692    Louisiana      Lake Charles              40,007     40,893    152,112    159,470    Missouri      Kansas City               21,372     19,696     74,435     75,630      Boonville                 21,586     20,421     78,581     79,816      Caruthersville             9,151      7,889     31,579     26,857      Missouri Total            52,109     48,006    184,595    182,303    Iowa      Bettendorf                22,963     24,789     91,657     92,429      Davenport                 13,544     13,847     49,005     52,333      Marquette                  7,224      7,901     29,875     32,968      Waterloo                  21,863     19,541     80,543     64,650      Iowa Total                65,594     66,078    251,080    242,380    Colorado      Black Hawk/Colorado       Central Station          30,715     32,468    123,382    144,521    Florida      Pompano                   40,900     48,964    142,672    160,831    International      Our Lucaya                 2,692      4,758     10,969     15,548    Property Net Revenues before     Insurance Recoveries and     Other                     284,174    292,372  1,055,252  1,106,745    Insurance Recoveries         2,932          -     62,932        348    Other                          113        252        458        597    Net Revenues from     Continuing Operations    $287,219   $292,624 $1,118,642 $1,107,690

                            Isle of Capri Casinos, Inc.                        Supplemental Data - EBITDA (1) (2)                             (unaudited, in thousands)                               Three Months Ended      Fiscal Year                              April 26,  April 27, April 26,  April 27,                                 2009      2008      2009       2008    Mississippi      Biloxi                    $2,070    $3,023    $9,050    $14,965      Natchez                    3,874     2,948    13,819     11,243      Lula                       6,504     7,210    20,294     22,166      Mississippi Total         12,448    13,181    43,163     48,374    Louisiana      Lake Charles               9,705    10,701    34,521     35,718    Missouri      Kansas City                5,597     3,942    15,108     13,749      Boonville                  7,606     5,878    25,526     24,543      Caruthersville             2,205     1,907     6,356      6,548      Missouri Total            15,408    11,727    46,990     44,840    Iowa      Bettendorf                 6,630     7,845    29,372     28,492      Davenport                  3,986     4,312    15,349     13,914      Marquette                  1,167     1,668     6,323      7,362      Waterloo                   6,824     4,838    22,969     15,026      Iowa Total                18,607    18,663    74,013     64,794    Colorado      Black Hawk/Colorado       Central Station           7,773     9,208    33,421     47,625    Florida      Pompano                    3,843     4,028     8,558      8,834    International      Our Lucaya                (1,204)      299    (2,917)      (826)    Property EBITDA Before     Corporate and Other Items  66,580    67,807   237,749    249,359    Corporate and Other         (8,650)  (13,721)  (40,872)   (48,017)    EBITDA Before Other Items   57,930    54,086   196,877    201,342    Other Items: (2)      Insurance Recoveries       3,030         -    93,315      2,105      Valuation Charges        (30,125)        -   (36,125)    (6,526)      Pre-opening                    -         -         -     (3,654)      Other                      2,332         -       (10)         -      Minority Interest              -         -         -    (4,868)    EBITDA from Continuing     Operations                $33,167   $54,086  $254,057   $188,399

                              Isle of Capri Casinos, Inc.     Supplemental Data - Reconciliation of Operating Income to EBITDA (1) (2)                               (unaudited, in thousands)                      Three Months Ended             Three Months Ended                         April 26, 2009                April 27, 2008                           Depreciation                  Depreciation                  Operating    and              Operating     and                   Income  Amortization EBITDA   Income  Amortization  EBITDA    Mississippi      Biloxi      $(1,859)   $3,929    $2,070   $(1,361)    $4,384     $3,023      Natchez       3,244       630     3,874     1,917      1,031      2,948      Lula          4,114     2,390     6,504     4,910      2,300      7,210      Mississippi       Total       5,499     6,949    12,448     5,466      7,715     13,181    Louisiana      Lake Charles  6,748     2,957     9,705     7,096      3,605     10,701    Missouri      Kansas City   4,449     1,148     5,597     2,665      1,277      3,942      Boonville     6,457     1,149     7,606     4,632      1,246      5,878      Caruthersville  980     1,225     2,205       524      1,383      1,907      Missouri       Total       11,886     3,522    15,408     7,821      3,906     11,727    Iowa      Bettendorf    4,141     2,489     6,630     5,514      2,331      7,845      Davenport     2,969     1,018     3,987     3,143      1,169      4,312      Marquette       543       624     1,167       969        699      1,668      Waterloo      3,871     2,952     6,823     1,790      3,048      4,838      Iowa Total   11,524     7,083    18,607    11,416      7,247     18,663    Colorado      Black Hawk/       Colorado       Central       Station      3,797     3,976     7,773     5,439      4,848     10,287    Florida      Pompano        (434)    4,277     3,843    (1,482)     4,432      2,950    International      Our Lucaya   (1,208)        4    (1,204)       296          3       299    Total Property     Before Corporate     and Other     Items         37,812    28,768    66,580    36,052     31,756     67,808    Corporate and     Other         (9,987)    1,337    (8,650)  (15,212)     1,490    (13,722)    Total Before     Other Items   27,825    30,105    57,930    20,840     33,246     54,086    Other     Items: (2)      Insurance       Recoveries   3,030         -     3,030         -          -          -      Valuation       Charges    (30,125)        -   (30,125)        -          -          -      Other         2,332         -     2,332         -          -          -    Total From     Continuing     Operations    $3,062   $30,105   $33,167   $20,840    $33,246    $54,086

                           Isle of Capri Casinos, Inc.     Supplemental Data - Reconciliation of Operating Income to EBITDA (1) (2)                             (unaudited, in thousands)                       Fiscal Year Ended             Fiscal Year Ended                         April 26, 2009                April 27, 2008                           Depreciation                  Depreciation                  Operating    and              Operating     and                   Income  Amortization EBITDA   Income  Amortization EBITDA    Mississippi      Biloxi       $(7,952) $17,002    $9,050   $(3,538)    $18,503   $14,965      Natchez       10,810    3,009    13,819     7,412       3,831    11,243      Lula          11,498    8,796    20,294    11,034      11,132    22,166      Mississippi       Total        14,356   28,807    43,163    14,908      33,466    48,374    Louisiana      Lake Charles  22,041   12,480    34,521    20,623      15,095    35,718    Missouri      Kansas City   10,369    4,739    15,108     8,121       5,628    13,749      Boonville     20,737    4,789    25,526    19,485       5,058    24,543      Caruthersville 1,638    4,718     6,356     2,574       3,974     6,548      Missouri       Total        32,744   14,246    46,990    30,180      14,660    44,840    Iowa      Bettendorf    20,090    9,282    29,372    18,967       9,525    28,492      Davenport     11,109    4,240    15,349     8,834       5,080    13,914      Marquette      3,704    2,619     6,323     4,380       2,982     7,362      Waterloo      11,377   11,592    22,969     5,661       9,365    15,026      Iowa Total    46,280   27,733    74,013    37,842      26,952    64,794    Colorado      Black Hawk/       Colorado       Central       Station      16,588   16,833    33,421    30,811      16,814    47,625    Florida      Pompano       (8,324)  16,882     8,558    (5,552)     16,276    10,724    International      Our Lucaya    (2,934)      17    (2,917)   (2,725)          9    (2,716)    Total Property     Before Corporate     and Other     Items         120,751  116,998   237,749   126,087     123,272   249,359    Corporate     and Other     (46,331)   5,459   (40,872)  (53,689)      5,672   (48,017)    Total before     Other Items    74,420  122,457   196,877    72,398     128,944   201,342    Other     Items: (2)      Insurance       Recoveries   93,315        -    93,315     2,105           -     2,105      Valuation        Charges    (36,125)       -   (36,125)   (6,526)          -    (6,526)      Pre-opening        -        -         -    (3,654)          -    (3,654)      Other            (10)       -       (10)        -           -         -      Minority       Interest          -        -         -         -           -    (4,868)    Total From     Continuing     Operations   $131,600 $122,457  $254,057   $64,323    $128,944  $188,399

1. EBITDA is "earnings before interest and other non-operating income (expense), income taxes, and depreciation and amortization." EBITDA is presented after consideration of minority interest. "Property EBITDA" is EBITDA before Corporate and development expenses and minority interest. 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, 2) used as a component of calculating required leverage and minimum interest coverage ratios under our Senior Credit Facility and 3) a principal basis of valuing gaming companies. Management uses EBITDA and Property EBITDA as the primary measure of the Company's operating properties' performance, and they are important components in evaluating the performance of management and other operating personnel in the determination of certain components of employee compensation. 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 EBITDA. Also, other gaming companies that report EBITDA information may calculate EBITDA in a different manner than the Company. A reconciliation of EBITDA and Property EBITDA to operating income is included in the financial schedules accompanying this release. A reconciliation of EBITDA to the Company's net income (loss) is shown below (in thousands).

                               Three Months Ended        Fiscal Year Ended                            April 26,        April 27,  April 26,   April 27,