Attached files
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| 8-K - FORM 8-K - GOLDEN ENTERTAINMENT, INC. | c64581e8vk.htm |
Exhibit 99.1
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NEWS RELEASE Lakes Entertainment, Inc. 130 Cheshire Lane, Suite 101 Minnetonka, MN 55305 952-449-9092 952-449-9353 (fax) www.lakesentertainment.com (NASDAQ: LACO) |
FOR FURTHER INFORMATION CONTACT:
Timothy Cope — 952-449-7030
Timothy Cope — 952-449-7030
FOR IMMEDIATE RELEASE:
May 11, 2011
May 11, 2011
LAKES ENTERTAINMENT ANNOUNCES
RESULTS FOR FIRST QUARTER 2011
RESULTS FOR FIRST QUARTER 2011
MINNEAPOLIS — May 11, 2011 — Lakes Entertainment, Inc. (NASDAQ: LACO) today
announced results for the three months ended April 3, 2011.
Net earnings for the first quarter of 2011 were $1.4 million, compared to a net loss of $4.7
million in the first quarter of 2010. Earnings from operations were $1.2 million for the first
quarter of 2011 compared to a loss from operations of less than $0.1 million for the first quarter
of 2010. Basic and diluted earnings were $0.05 per share for the first quarter of 2011 compared to
basic and diluted losses of $0.18 per share for the first quarter of 2010.
Lakes Entertainment reported first quarter 2011 revenues of $5.9 million, compared to
prior-year first quarter revenues of $7.0 million. This decline was due to the elimination of
management fees from the Cimarron Casino project as a result of the termination of that agreement
in May 2010, as well as a decline in management fees associated with the Red Hawk Casino project in
Shingle Springs, California. The decline was partially offset by an increase in management fees
earned from the Four Winds Casino Resort, in New Buffalo Michigan, during the first quarter of 2011
compared to the prior-year period.
For the first quarter of 2011, Lakes’ selling, general and administrative expenses decreased in
comparison to the first quarter of 2010 by approximately $0.6 million to $2.7 million. Selling,
general and administrative expenses consisted primarily of payroll and related expenses, travel
expenses and professional fees. The decline in selling, general and administrative costs in the
first quarter of 2011 compared to the first quarter of 2010 resulted primarily from decreases in
payroll and related expenses and travel expenses.
Lakes recognized impairment losses of $0.9 million during the first quarter of 2011 compared to
$2.7 million in the prior-year period. Impairment losses in the first quarters of 2011 and 2010
included approximately $0.9 million and $0.6 million, respectively, due to continued uncertainty
surrounding the completion of the project with the Jamul Indian Village (“Jamul Tribe”) near San
Diego, California. Also included in impairment losses for the first quarter of 2010 were $2.1
million related to the previously announced termination agreement entered into with the Iowa Tribe
of Oklahoma in May 2010 related to the Ioway Casino project.
Net unrealized gains on notes receivable relate to the Company’s notes receivable from Indian
tribes for casino projects that are not yet open, which are adjusted to estimated fair value based
upon the current status of the related tribal casino projects and evolving market conditions. In
the first quarter of 2011, net unrealized gains on notes receivable were $0.9 million, compared to
$1.8 million in the prior year period. The net unrealized gains in the first quarter of 2011 were
primarily related to the project with the Jamul Tribe due primarily to improvements in the credit
markets. The net unrealized gains in the first quarter of 2010 included $0.9 million related to the
project for the Ioway Casino related to the termination agreement with the Iowa Tribe of Oklahoma
discussed above. The first quarter 2010 net unrealized gains also included $0.9 million in gains
related to the Jamul Tribe due primarily to improvements in the credit markets.
Amortization of intangible assets related to the operating casinos was $1.9 million for the first
quarter of 2011 compared to $2.8 million for the first quarter of 2010. The decrease in
amortization costs related to the previously announced partial impairment of intangible assets
associated with the Shingle Springs project during the fourth quarter of 2010.
Other income (expense), net for the first quarter of 2011 was $1.1 million compared to $1.5 million
for the first quarter of 2010.
The income tax provision for the first quarter of 2011 was $1.0 million compared to $6.1 million
for the first quarter of 2010. Lakes’ income tax provision in the current year quarter consists
primarily of current income tax provision. Lakes’ income tax provision in the prior year period
was primarily due to the effect of valuation allowances associated with 2010 timing differences.
Tim Cope, President and Chief Financial Officer of Lakes stated, “Although revenue declined in the
first quarter of 2011 compared to the first quarter of 2010, management fees from each of our
managed properties met our expectations for the first quarter of 2011. We continue to focus on
achieving operating efficiencies at our managed properties as well as at the corporate level.”
Further commenting, Lyle Berman, Chief Executive Officer of Lakes stated, “During the first
quarter, we made additional investments of approximately $6.0 million related to our investment in
Rock Ohio Ventures, LLC and its proposed casino developments in Cincinnati and Cleveland. We look
forward to the continued progress of these projects which we believe will add value to our company.
We also continue to evaluate other potential projects in order to increase shareholder value.”
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About Lakes Entertainment
Lakes Entertainment, Inc. currently has development and management or financing agreements with
three separate Tribes for casino operations in Michigan, and California, for a total of three
separate casino sites. Lakes is currently managing the Four Winds Casino Resort for the Pokagon
Band of Potawatomi Indians and the Red Hawk Casino for the Shingle Springs Band of Miwok Indians.
Lakes is also involved in other business activities, including the development of new table games
for licensing to Tribal and non-Tribal casinos.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. Certain information included in this press release (as well as information included in
oral statements or other written statements made or to be made by Lakes Entertainment, Inc.)
contains statements that are forward-looking, such as statements relating to plans for future
expansion and other business development activities as well as other capital spending, financing
sources and the effects of regulation (including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and uncertainties that could significantly
affect anticipated results in the future and, accordingly, such results may differ from those
expressed in any forward-looking statements made by or on behalf of the company. These risks and
uncertainties include, but are not limited to, need for potential future financing to meet Lakes’
development needs; those relating to the inability to complete or possible delays in completion of
Lakes’ casino projects, including various regulatory approvals and numerous other conditions which
must be satisfied before completion of these projects; possible termination or adverse modification
of management or development contracts; Lakes operates in a highly competitive industry; possible
changes in regulations; reliance on continued positive relationships with Indian tribes and
repayment of amounts owed to Lakes by Indian tribes; possible need for future financing to meet
Lakes’ expansion goals; risks of entry into new businesses; and reliance on Lakes’ management. For
more information, review the company’s filings with the Securities and Exchange Commission.
# # #
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LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
Condensed Consolidated Balance Sheets
(In thousands)
| April 3, 2011 | January 2, 2011 | |||||||
Assets |
(Unaudited) | |||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 31,426 | $ | 45,233 | ||||
Accounts receivable |
2,864 | 1,696 | ||||||
Current portion of notes receivable from Indian casino projects |
1,696 | 2,405 | ||||||
Income tax receivable |
929 | — | ||||||
Other |
1,370 | 1,983 | ||||||
Total current assets |
38,285 | 51,317 | ||||||
Property and equipment, net |
5,051 | 5,103 | ||||||
Long-term assets related to Indian casino projects: |
||||||||
Notes and interest receivable, net of current portion and
allowance |
31,808 | 31,192 | ||||||
Notes receivable at fair value |
12,122 | 11,129 | ||||||
Intangible assets |
13,930 | 15,873 | ||||||
Management fee receivable and other |
6,844 | 6,155 | ||||||
Total long-term assets related to Indian casino projects |
64,704 | 64,349 | ||||||
Other assets: |
||||||||
Investment in unconsolidated investees |
8,354 | 2,367 | ||||||
Land held for development |
3,470 | 3,470 | ||||||
Other |
40 | 40 | ||||||
Total other assets |
11,864 | 5,877 | ||||||
Total assets |
$ | 119,904 | $ | 126,646 | ||||
Liabilities and shareholders’ equity |
||||||||
Current liabilities: |
||||||||
Current portion of contract acquisition costs payable |
$ | 1,311 | $ | 1,326 | ||||
Income taxes payable |
— | 7,822 | ||||||
Other |
1,545 | 1,683 | ||||||
Total current liabilities |
2,856 | 10,831 | ||||||
Long-term contract acquisition costs payable, net of current portion |
5,518 | 5,830 | ||||||
Total liabilities |
8,374 | 16,661 | ||||||
Total shareholders’ equity |
111,530 | 109,985 | ||||||
Total liabilities and shareholders’ equity |
$ | 119,904 | $ | 126,646 | ||||
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LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Earnings (Loss)
(In thousands, except per share data)
Unaudited Condensed Consolidated Statements of Earnings (Loss)
(In thousands, except per share data)
| Three months ended | ||||||||
| April 3, 2011 | April 4, 2010 | |||||||
Revenues: |
||||||||
Management fees |
$ | 5,835 | $ | 6,937 | ||||
License fees and other |
58 | 17 | ||||||
Total revenues |
5,893 | 6,954 | ||||||
Costs and expenses: |
||||||||
Selling, general and administrative |
2,656 | 3,235 | ||||||
Impairment losses — other |
874 | 2,664 | ||||||
Amortization of intangible assets related to operating casinos |
1,943 | 2,785 | ||||||
Depreciation |
57 | 65 | ||||||
Total costs and expenses |
5,530 | 8,749 | ||||||
Net unrealized gains on notes receivable |
862 | 1,770 | ||||||
Earnings (loss) from operations |
1,225 | (25 | ) | |||||
Other income (expense): |
||||||||
Interest income |
1,468 | 2,247 | ||||||
Interest expense |
(321 | ) | (687 | ) | ||||
Equity in loss of unconsolidated investees |
— | (27 | ) | |||||
Other |
— | (72 | ) | |||||
Total other income (expense), net |
1,147 | 1,461 | ||||||
Earnings before income taxes |
2,372 | 1,436 | ||||||
Income taxes |
992 | 6,123 | ||||||
Net earnings (loss) |
$ | 1,380 | $ | (4,687 | ) | |||
Weighted-average common shares outstanding |
||||||||
Basic |
26,398 | 26,361 | ||||||
Diluted |
26,428 | 26,361 | ||||||
Earnings (loss) per share |
||||||||
Basic |
$ | 0.05 | $ | (0.18 | ) | |||
Diluted |
$ | 0.05 | $ | (0.18 | ) | |||
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