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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
x               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 26, 2003

OR

o    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________

Commission File Number 0-20538

ISLE OF CAPRI CASINOS, INC.
Delaware
 
41-1659606
 
 
 
(State or other jurisdiction
 
(I.R.S. Employer
of incorporation or organization)
 
Identification Number)
 
 
 
1641 Popps Ferry Road, Biloxi, Mississippi
 
39532
(Address of principal executive offices)
 
(Zip Code)
 
 
 
Registrant's telephone number, including area code:
 
(228) 396-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark if the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No o

        As of November 18, 2003, the Company had a total of 29,520,342 shares of Common Stock outstanding (which excludes 3,351,708 shares held by us in treasury).
 
     
 


ISLE OF CAPRI CASINOS, INC.
FORM 10-Q
INDEX
 
PAGE

 
 
PART I      FINANCIAL INFORMATION
 
 
 
ITEM 1. FINANCIAL STATEMENTS
 
               CONSOLIDATED BALANCE SHEETS, OCTOBER 26, 2003 (UNAUDITED)
 
               AND APRIL 27, 2003
2
 
 
               CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND SIX
 
               MONTHS ENDED OCTOBER 26, 2003 AND OCTOBER 27, 2002 (UNAUDITED)
3
 
 
               CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE SIX
 
               MONTHS ENDED OCTOBER 26, 2003 (UNAUDITED)
4
 
 
               CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
 
               ENDED OCTOBER 26, 2003 AND OCTOBER 27, 2002 (UNAUDITED)
5
 
 
               NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
7
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 
               AND RESULTS OF OPERATION
27
 
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
39
 
 
ITEM 4. CONTROLS AND PROCEDURES
41
   
PART II OTHER INFORMATION
 
 
 
ITEM 1. LEGAL PROCEEDINGS
42
 
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
43
 
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
43
 
 
ITEM 4. SUBMISSION OF MATTERS SUBJECT TO A VOTE OF SECURITY HOLDERS
44
 
 
ITEM 5. OTHER INFORMATION
44
 
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
45
 
 
SIGNATURE
46
EXHIBIT LIST
47

 
     
 
 

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS


All statements other than statements of historical or current facts included in this report on Form 10-Q or incorporated by reference herein, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. 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. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been corr ect. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements.

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 such reports with, or furnish them to, the SEC.
 
 
  1  
 


PART I - FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS.
 



ISLE OF CAPRI CASINOS, INC.  
CONSOLIDATED BALANCE SHEETS  
(In thousands)  
 
  
 
 
 
  
October 26,
April 27,
 
  
2003
2003
   
 
 
ASSETS
   
(Unaudited)
 
  
 
  
Current assets:
   
 
    
 
  
     Cash and cash equivalents
 
$
105,590
 
$
94,626
 
     Accounts receivable
    
8,877
   
7,786
 
     Notes receivable
    
730
   
5,658
 
     Income tax receivable
   
-
   
2,260
 
     Deferred income taxes
    
6,397
   
7,433
 
     Prepaid expenses and other assets
   
23,221
   
17,982
 
   
 
 
          Total current assets
   
144,815
   
135,745
 
Property and equipment, net
    
870,267
   
841,332
 
Other assets:
   
 
    
 
  
     Goodwill
   
327,829
   
326,309
 
     Other intangible assets
   
72,244
   
75,344
 
     Deferred financing costs, net of accumulated amortization of $13,651
   
 
    
 
  
        and $11,500, respectively
   
21,177
   
22,962
 
     Restricted cash
    
2,561
   
2,551
 
     Other
    
5,377
   
3,961
 
   
 
 
          Total assets
 
$
1,444,270
 
$
1,408,204
 
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
   
 
    
 
  
Current liabilities:
   
 
    
 
  
     Current maturities of long-term debt
  
$
16,659
 
$
24,757
 
     Accounts payable trade
    
18,318
   
18,630
 
     Accrued liabilities:
   
 
    
 
  
         Interest
    
6,980
   
7,132
 
         Payroll and related
    
47,644
   
45,578
 
         Property and other taxes
    
26,500
   
17,852
 
         Income taxes
    
5,781
   
-
 
         Progressive jackpots and slot club awards
    
15,861
   
15,583
 
         Other
    
27,125
   
26,639
 
   
 
 
            Total current liabilities
    
164,868
   
156,171
 
Long-term debt, less current maturities
   
997,071
   
1,003,230
 
Deferred income taxes
   
10,074
   
9,700
 
Deferred state income taxes
    
7,675
   
7,675
 
Other accrued liabilities
    
13,061
   
13,347
 
Minority interest
    
18,521
   
14,177
 
Stockholders' equity:
   
 
    
 
  
     Preferred stock, $.01 par value; 2,000 shares authorized; none issued
    
-
   
-
 
     Common stock, $.01 par value; 45,000 shares authorized; shares issued and
   
 
    
 
  
         outstanding: 32,859 at October 26, 2003 and 32,377 at April 27, 2003
    
326
   
322
 
     Class B common stock, $.01 par value; 3,000 shares authorized; none issued
    
-
   
-
 
     Additional paid-in capital
   
141,662
   
137,542
 
     Unearned compensation
    
(1,973)
 
  
(1,498)
 
     Retained earnings
    
124,608
   
100,346
 
     Accumulated other comprehensive loss, net of income tax benefit of $1,117 and
   
 
    
 
  
         $2,527, respectively
    
(1,937)
 
  
(4,284)
 
   
 
 
 
    
262,686
   
232,428
 
Treasury stock, 3,352 shares at October 26, 2003 and 3,293 shares at April 27, 2003
    
(29,686)
 
  
(28,524)
 
   
 
 
     Total stockholders' equity
    
233,000
   
203,904
 
   
 
 
     Total liabilities and stockholders' equity
  
$
1,444,270
 
$
1,408,204
 
   
 
 

See notes to the consolidated financial statements.
 
 
  2  
 
 


ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)
 
  
 
 
 
 
 
  
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
 
     Rooms
   
11,209
   
13,898
   
23,069
   
28,635
 
     Pari-mutuel commissions and fees
    
3,032
   
4,038
   
7,750
   
9,643
 
     Food, beverage and other
   
35,011
   
35,847
   
72,668
   
72,940
 
   
 
 
 
 
        Gross revenues
   
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 expenses:
   
 
    
 
    
 
    
 
  
     Casino
   
47,037
   
47,133
   
96,475
   
97,119
 
     Gaming taxes
   
60,337
   
56,414
   
122,556
   
115,063
 
     Rooms
   
2,523
   
3,473
   
5,095
   
7,136
 
     Pari-mutuel
   
2,361
   
2,948
   
5,842
   
7,008
 
     Food, beverage and other
   
7,461
   
8,482
   
16,032
   
17,787
 
     Marine and facilities
    
16,953
   
17,136
   
33,033
   
35,392
 
     Marketing and administrative
    
75,107
   
72,589
   
150,805
   
144,441
 
     Preopening
    
307
   
-
   
598
   
-
 
     Depreciation and amortization
   
21,437
   
18,277
   
43,054
   
36,261
 
   
 
 
 
 
        Total operating expenses
   
233,523
   
226,452
   
473,490
   
460,207
 
   
 
 
 
 
Operating income
    
36,143
   
33,661
   
81,927
   
76,569
 
     Interest expense, net
   
(20,642)
 
  
(20,650)
 
  
(41,740)
 
  
(41,690)
 
     Minority interest
   
(2,657)
 
  
(2,352)<