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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 July 25, 2004

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). Yesx Noo

As of August 17, 2004 the Company had a total of 29,522,196 shares of Common Stock outstanding (which excludes 3,614,700 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, JULY 25, 2004 (UNAUDITED)
 
               AND APRIL 25, 2004
2
 
 
              CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS
 
              ENDED JULY 25, 2004 AND JULY 27, 2003 (UNAUDITED)
3
 
 
              CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE
 
              MONTHS ENDED JULY 25 2004 (UNAUDITED)
4
 
 
              CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
 
              ENDED JULY 25, 2004 AND JULY 27, 2003 (UNAUDITED)
5
 
 
7
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 
               AND RESULTS OF OPERATION
24
 
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
34
 
 
ITEM 4. CONTROLS AND PROCEDURES
35
   
PART II OTHER INFORMATION
 
 
 
ITEM 1. LEGAL PROCEEDINGS
36
 
ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF
 
               EQUITY SECURITIES
37
 
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
37
 
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
37
 
 
ITEM 5. OTHER INFORMATION
37
 
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
38
 
 
39
40

 
     

 
 


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 correct. All sub sequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these 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, except per share data)
 
ASSETS
   
July 25,
   
April 25,
 
 
   
2004
   
2004
 
   
 
 
     

(Unaudited) 

       
Current assets:
   
 
   
 
 
     Cash and cash equivalents
 
$
151,024
 
$
134,582
 
     Accounts receivable
   
11,755
   
10,427
 
     Income tax receivable
   
-
   
2,860
 
     Deferred income taxes
   
11,139
   
11,283
 
     Prepaid expenses and other assets
   
23,800
   
16,169
 
   
 
 
            Total current assets
   
197,718
   
175,321
 
Property and equipment, net
   
914,824
   
907,460
 
Other assets:
   
 
   
 
 
     Goodwill
   
334,015
   
333,780
 
     Other intangible assets
   
72,358
   
72,349
 
     Deferred financing costs, net
   
22,609
   
23,340
 
     Restricted cash
   
2,541
   
2,482
 
     Prepaid deposits and other
   
8,787
   
9,303
 
   
 
 
             Total assets
 
$
1,552,852
 
$
1,524,035
 
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
   
 
   
 
 
             
Current liabilities:
   
 
   
 
 
     Current maturities of long-term debt
 
$
8,854
 
$
8,040
 
     Accounts payable trade
   
19,205
   
21,725
 
     Accrued liabilities:
   
 
   
 
 
        Interest
   
22,819
   
10,311
 
        Payroll and related
   
44,777
   
45,588
 
        Property and other taxes
   
19,994
   
17,167
 
        Income taxes
   
4,689
   
-
 
        Progressive jackpots and slot club awards
   
15,932
   
14,828
 
        Other
   
24,683
   
21,856
 
   
 
 
            Total current liabilities
   
160,953
   
139,515
 
Long-term debt, less current maturities
   
1,081,115
   
1,080,824
 
Deferred income taxes
   
21,789
   
21,825
 
Deferred state income taxes
   
8,191
   
8,191
 
Other accrued liabilities
   
12,491
   
12,091
 
Minority interest
   
21,579
   
20,183
 
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: 33,128 at July 25, 2004 and 33,055 at April 25, 2004
   
331
   
330
 
        Class B common stock, $.01 par value; 3,000 shares authorized; none issued
   
-
   
-
 
        Additional paid-in capital
   
143,124
   
143,385
 
        Unearned compensation
   
(2,166
)
 
(1,413
)
        Retained earnings
   
138,704
   
128,095
 
        Accumulated other comprehensive income
   
1,174
   
521
 
   
 
 
 
   
281,167
   
270,918
 
   Treasury stock, 3,615 shares at July 25, 2004 and 3,338 shares at April 25, 2004
   
(34,433)
 
 
(29,512)
 
   
 
 
        Total stockholders' equity
   
246,734
   
241,406
 
   
 
 
        Total liabilities and stockholders' equity
 
$
1,552,852
 
$
1,524,035
 
   
 
 

See notes to the unaudited consolidated financial statements.

 
  2  

 
 
        ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)

 
 
Three Months Ended
   
 
 
July 25,
July 27,
 
   
2004
   
2003
 
   
 
 
Revenues:
   
 
   
 
 
   Casino
 
$
284,195
 
$
288,783
 
   Rooms
   
12,925
   
11,860
 
   Pari-mutuel commissions and fees
   
4,439
   
4,718
 
   Food, beverage and other
   
36,681
   
37,657
 
   
 
 
      Gross revenues
   
338,240
   
343,018
 
      Less promotional allowances
   
57,368
   
57,267
 
   
 
 
            Net revenues
   
280,872
   
285,751
 
   Operating expenses:
   
 
   
 
 
   Casino
   
45,662
   
46,419
 
   Gaming taxes
   
62,944
   
62,219
 
   Rooms
   
2,838
   
2,572
 
   Pari-mutuel
   
3,470
   
3,481
 
   Food, beverage and other
   
9,346
   
8,571
 
   Marine and facilities
   
17,131
   
16,080
 
   Marketing and administrative
   
78,929
   
78,717
 
   Preopening
   
55
   
291
 
   Depreciation and amortization
   
23,623
   
21,617
 
   
 
 
      Total operating expenses
   
243,998
   
239,967
 
   
 
 
Operating income
   
36,874
   
45,784
 
   Interest expense, net
   
(17,400)
 
 
(21,098)
   
   Minority interest
   
(2,133)
 
 
(2,833)
 
   
 
 
Income before income taxes
   
17,341
   
21,853
 
   Income taxes
   
6,732
   
8,301
 
   
 
 
Net income
 
$
10,609
 
$
13,552
 
   
 
 
 
   
 
   
 
 
Net income per common share-basic
 
$
0.36
 
$
0.46
 
Net income per common share-diluted
 
$
0.35
 
$
0.45
 
 
   
 
   
 
 
Weighted average basic shares
   
29,686
   
29,146
 
Weighted average diluted shares
   
30,749
   
30,355
 

See notes to the unaudited consolidated financial statements.
 
  3  

 
 
   ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(In thousands)

 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
Shares of
 
 
 
Additional
 
Unearned
 
 
 
Compre-
 
 
 
Total
 
Common
 
Common
 
Paid-in
 
Compen-
 
Retained
 
hensive
 
Treasury
 
Stockholders'