ISLE OF CAPRI CASINOS INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 24, 2004

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.

Indicate by check mark if the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

As of November 30, 2004 the Company had a total of 29,667,732 shares of Common Stock outstanding (which excludes 3,614,700 shares held by us in treasury).

ISLE OF CAPRI CASINOS, INC.

	PAGE

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS, OCTOBER 24, 2004 (UNAUDITED)
AND APRIL 25, 2004		2

CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS AND SIX
MONTHS ENDED OCTOBER 24, 2004 AND OCTOBER 26, 2003 (UNAUDITED)		3

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE SIX
MONTHS ENDED OCTOBER 24, 2004 (UNAUDITED)		4

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED OCTOBER 24, 2004 AND OCTOBER 26, 2003 (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		42

ITEM 4. CONTROLS AND PROCEDURES		43

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS		44

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		45

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		45

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		46

ITEM 5. OTHER INFORMATION		46

ITEM 6. EXHIBITS		47

SIGNATURE		48
EXHIBITS		49

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 subsequent 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.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

ASSETS	October 24,		April 25,
	2004		2004
	(Unaudited)
Current assets:
Cash and cash equivalents	$	128,973	$	134,582
Accounts receivable, net		9,891		10,427
Income tax receivable		-		2,860
Deferred income taxes		11,147		11,283
Prepaid expenses and other assets		23,128		16,169
Total current assets		173,139		175,321
Property and equipment, net		945,337		907,460
Other assets:
Goodwill		336,019		333,780
Other intangible assets		72,358		72,349
Deferred financing costs, net		21,595		23,340
Restricted cash		2,193		2,482
Prepaid deposits and other		8,087		9,303
Total assets	$	1,558,728	$	1,524,035
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	7,852	$	8,040
Accounts payable trade		29,120		21,725
Accrued liabilities:
Interest		9,853		10,311
Payroll and related		44,917		45,588
Property and other taxes		23,892		17,167
Income taxes		6,463		-
Progressive jackpots and slot club awards		16,890		14,828
Other		26,647		21,856
Total current liabilities		165,634		139,515
Long-term debt, less current maturities		1,079,060		1,080,824
Deferred income taxes		21,787		21,825
Deferred state income taxes		8,191		8,191
Other accrued liabilities		12,738		12,091
Minority interest		23,217		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: 33,189 at October 24, 2004 and 33,055 at April 25, 2004		332		330
Class B common stock, $.01 par value; 3,000 shares authorized; none issued		-		-
Additional paid-in capital		143,945		143,385
Unearned compensation		(1,984)		(1,413)
Retained earnings		139,152		128,095
Accumulated other comprehensive income		1,089		521
		282,534		270,918
Treasury stock, 3,615 shares at October 24, 2004 and 3,338 shares at April 25, 2004		(34,433)		(29,512)
Total stockholders' equity		248,101		241,406
Total liabilities and stockholders' equity	$	1,558,728	$	1,524,035
See notes to the unaudited consolidated financial statements.

ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	Three Months Ended				Six Months Ended
	October 24,		October 26,		October 24,		October 26,
	2004		2003		2004		2003
Revenues:
Casino	$	275,492	$	275,527	$	559,687	$	564,310
Rooms		12,334		11,209		25,259		23,069
Pari-mutuel commissions and fees		3,362		3,032		7,801		7,750
Food, beverage and other		36,755		35,011		73,436		72,668
Gross revenues		327,943		324,779		666,183		667,797
Less promotional allowances		58,221		55,113		115,589		112,380
Net revenues		269,722		269,666		550,594		555,417
Operating expenses:
Casino		47,138		44,625