Form 8-K ISLE OF CAPRI CASINOS For: Oct 19

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 19, 2015

 

ISLE OF CAPRI CASINOS, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

(314) 813-9200

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.245)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.01. Completion of Acquisition or Disposition of Assets

 

On October 19, 2015, Isle of Capri Casinos, Inc. (the “Company”) completed the previously announced sale of all of the equity interests of Natchez Sub, LLC (“NewCo”), a recently formed wholly-owned subsidiary of IOC-Natchez, Inc., a wholly-owned subsidiary of the Company, to Casino Holding Investment Partners, LLC (“Buyer”), and its affiliate, Natchez Casino OpCo, LLC.  Prior to closing, IOC-Natchez, Inc. transferred and conveyed to NewCo the owned real property, a customer list and certain other non-gaming assets related to the Isle of Capri Hotel located in Natchez, Mississippi, and NewCo assumed certain non-gaming liabilities of IOC-Natchez, Inc. related to the hotel.

 

Total proceeds from the sale were approximately $11.5 million, subject to a customary purchase price adjustment. Upon completion of the sale, IOC—Natchez, Inc. ceased all operations in Natchez, Mississippi.  IOC-Natchez, Inc. is in process of disposing of the remaining assets, which it expects to complete within 90 days.

 

Forward-Looking Statements

 

This Current Report on Form 8-K may be deemed to contain forward-looking statements, which are subject to change. These forward-looking statements may be significantly impacted, either positively or negatively, by various factors, including, without limitation, licensing and other regulatory approvals, financing sources, development and construction activities, costs and delays, weather, permits, competition and business conditions in the gaming industry. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein.

 

Additional information concerning potential factors that could affect the Company’s financial condition, results of operations and expansion projects is included in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.

 

Item 9.01. Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information

 

The Company’s unaudited pro forma consolidated balance sheet as of July 26, 2015 and the unaudited pro forma consolidated statements of operations for the fiscal year ended April 26, 2015 and the three months ended July 26, 2015 are filed herewith as Exhibit 99.1 and are incorporated by reference herein.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Isle of Capri Casinos, Inc. Unaudited Pro Forma Financial Information
99.2		Press Release, dated October 19, 2015

 

2

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

			ISLE OF CAPRI CASINOS, INC.
Date: October 22, 2015	By:		/s/ Edmund L. Quatmann, Jr.
	Name:		Edmund L. Quatmann, Jr.
	Title:		Chief Legal Officer

 

3

 

EXHIBIT INDEX

 

Number		Exhibit
99.1		Isle of Capri Casinos, Inc. Unaudited Pro Forma Financial Information
99.2		Press Release, dated October 19, 2015

 

4

 Exhibit 99.1

 

ISLE OF CAPRI CASINOS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

JULY 26, 2015

(In thousands, except share and per share amounts)

 

					PRO FORMA
					ADJUSTMENTS			AS REPORTED
					SALE OF			WITH
					IOC - NATCHEZ			PRO FORMA
		AS REPORTED			INC.			ADJUSTMENTS
ASSETS
Current assets:
Cash and cash equivalents		$	61,966		$	10,500	(a)	$	72,466
Marketable securities		19,445						19,445
Accounts receivable, net		11,585						11,585
Inventory		6,365						6,365
Deferred income taxes		4,626						4,626
Prepaid expenses and other assets		17,522						17,522
Assets held for sale		5,386			(5,386		)(b)	—
Total current assets		126,895			5,114			132,009
Property and equipment, net		900,654						900,654
Other assets:
Goodwill		108,970						108,970
Other intangible assets, net		53,864						53,864
Deferred financing costs, net		17,903						17,903
Restricted cash		9,724						9,724
Prepaid deposits and other		5,229						5,229
Total assets		$	1,223,239		$	5,114		$	1,228,353
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		75						$	75
Accounts payable		25,925						25,925
Accrued liabilities:
Payroll and related		32,816			1,100		(c)	33,916
Property and other taxes		23,110						23,110
Income taxes payable		125						125
Interest		14,492						14,492
Progressive jackpots and slot club awards		16,520						16,520
Other		22,198			(1,000		)(d)	21,198
Total current liabilities		135,261			100			135,361
Long-term debt, less current maturities		989,209						989,209
Deferred income taxes		38,185						38,185
Other accrued liabilities		18,032						18,032
Other long-term liabilities		13,912						13,912
Stockholders’ equity:
Preferred stock		—						—
Common stock		421						421
Class B common stock		—						—
Additional paid-in capital		241,500						241,500
Retained earnings		(195,928		)	5,014		(e)	(190,914		)
		45,993			5,014			51,007
Treasury stock		(17,353		)				(17,353		)
Total stockholders’ equity		28,640			5,014			33,654
Total liabilities and stockholders’ equity		$	1,223,239		$	5,114		$	1,228,353

 

See accompanying Notes to Unaudited Pro Forma Financial Statements

 

 

ISLE OF CAPRI CASINOS, INC.

UNAUDITED PRO FORMACONSOLIDATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED JULY 26, 2015

(In thousands, except share and per share amounts)

 

					PRO FORMA
					ADJUSTMENTS			AS REPORTED
					SALE OF			WITH
					IOC - NATCHEZ,			PRO FORMA
		AS REPORTED			INC.			ADJUSTMENTS
Revenues:
Casino		$	260,053		$	—		$	260,053
Rooms		8,115			—			8,115
Food, beverage, pari-mutuel and other		32,989			—			32,989
Gross revenues		301,157			—			301,157
Less promotional allowances		(54,233		)	—			(54,233		)
Net revenues		246,924			—			246,924
Operating expenses:
Casino		38,713			—			38,713
Gaming taxes		66,359			—			66,359
Rooms		1,883			—			1,883
Food, beverage, pari-mutuel and other		12,122			—			12,122
Marine and facilities		14,106			—			14,106
Marketing and administrative		56,400			—			56,400
Corporate and development		7,643			—			7,643
Valuation charges		—			—			—
Depreciation and amortization		20,051			—			20,051
Total operating expenses		217,277			—			217,277
Operating income:		29,647			—			29,647
Interest expense		(17,441		)	—			(17,441		)
Interest income		79			—			79
Loss on early extinguishment of debt		(2,966		)	—			(2,966		)
Income from continuing operations before income taxes		9,319			—			9,319
Income tax provision		(851		)	—			(851		)
Income (loss) from continuing operations		8,468			—			8,468
Loss from discontinued operations, net of income tax provision of $- for the three months ended July 26, 2015		(5,324		)	—			(5,324		)
Net income		$	3,144		$	—		$	3,144
Income (loss) per common share-basic:
Income from continuing operations		$	0.21		$	—		$	0.21
Loss from discontinued operations, net of income taxes		(0.13		)	—			(0.13		)
Net income		$	0.08		$	—		$	0.08
Income (loss) per common share-dilutive:
Income from continuing operations		$	0.21		$	—		$	0.21
Loss from discontinued operations, net of income taxes		(0.13		)	—			(0.13		)
Net income		$	0.08		$	—		$	0.08
Weighted average basic shares		40,580,806			40,580,806			40,580,806
Weighted average diluted shares		41,253,611			41,253,611			41,253,611

 

See accompanying Notes to Unaudited Pro Forma Financial Statements

 

 

ISLE OF CAPRI CASINOS, INC.

UNAUDITED PRO FORMACONSOLIDATED STATEMENT OF OPERATIONS

FISCAL YEAR ENDED APRIL 26, 2015

(In thousands, except share and per share amounts)

 

					RECLASSIFICATION
					OF			PRO FORMA
					IOC-NATCHEZ,			ADJUSTMENTS			AS REPORTED
					INC. TO			SALE OF			WITH
					DISCONTINUED			IOC - NATCHEZ,			PRO FORMA
		AS REPORTED			OPERATIONS			INC.			ADJUSTMENTS
Revenues:
Casino		$	1,054,926		$	22,685		$	—		$	1,032,241
Rooms		31,565			1,138			—			30,427
Food, beverage, pari-mutuel and other		139,816			2,600			—			137,216
Gross revenues		1,226,307			26,423			—			1,199,884
Less promotional allowances		(230,029		)	(7,190		)	—			(222,839		)
Net revenues		996,278			19,233			—			977,045
Operating expenses:
Casino		161,051			4,505			—			156,546
Gaming taxes		265,527			2,164			—			263,363
Rooms		6,773			197			—			6,576
Food, beverage, pari-mutuel and other		49,542			639			—			48,903
Marine and facilities		58,144			2,150			—			55,994
Marketing and administrative		234,471			10,615			—			223,856
Corporate and development		29,088			—			—			29,088
Valuation charges		9,000			—			—			9,000
Depreciation and amortization		78,875			1,076			—			77,799
Total operating expenses		892,471			21,346			—			871,125
Operating income (loss):		103,807			(2,113		)	—			105,920
Interest expense		(84,131		)	—			—			(84,131		)
Interest income		369			—			—			369
Loss on early extinguishment of debt		(13,757		)	—			—			(13,757		)
Income (loss) from continuing operations before income taxes		6,288			(2,113		)	—			8,401
Income tax (provision)		(1,111		)	—			—			(1,111		)
Income (loss) from continuing operations		5,177			(2,113		)	—			7,290
Loss from discontinued operations, net of income tax provision of $- for the twelve months ended April 26, 2015		—			2,113			—			(2,113		)
Net income		$	5,177		$	—		$	—		$	5,177
Income (loss) per common share-basic:
Income from continuing operations		$	0.13		$	(0.05	)	$	—		$	0.18
Loss from discontinued operations, net of income taxes		—			0.05			—			(0.05		)
Net income		$	0.13		$	—		$	—		$	0.13
Income (loss) per common share-dilutive:
Income from continuing operations		$	0.13		$	(0.05	)	$	—		$	0.18
Loss from discontinued operations, net of income taxes		—			0.05			—			(0.05		)
Net income		$	0.13		$	—		$	—		$	0.13
Weighted average basic shares		39,955,735			39,955,735			39,955,735			39,955,735
Weighted average diluted shares		40,320,267			40,320,267			40,320,267			40,320,267

 

See accompanying Notes to Unaudited Pro Forma Financial Statements

 

 

ISLE OF CAPRI CASINOS, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

 

1.              Basis of Presentation

 

The unaudited pro forma condensed consolidated financial statements of Isle of Capri Casinos, Inc. (the “Company”) include adjustments to the Company’s historical financial statements to reflect the disposition and, where necessary, the reclassification to discontinued operations, of its Natchez, Mississippi casino operations under its subsidiary, IOC — Natchez, Inc.

 

The historical financial information of the Company has been derived from the historical audited and unaudited consolidated financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended April 26, 2015 and its Quarterly Report on From 10-Q for the quarter ended July 26, 2015.  The unaudited pro forma balance sheet was prepared as if the disposition occurred as of July 26, 2015.  The unaudited pro forma consolidated statements of operations for the fiscal year ended April 26, 2015, and the three months ended July 26, 2015, were prepared as if the disposition of IOC — Natchez, Inc. occurred as the 1st day of each presented period.  The pro forma adjustments are based on factually supportable available information.

 

The unaudited pro forma statements presented do not purport to represent what the financial position or results of operations of the Company would have been had the transaction occurred on the dates noted above, or to project the results of operations or financial position of the Company for any future periods.  In the opinion of management, all necessary adjustments to the unaudited pro forma financial information have been made.

 

2.              Adjustments to the Unaudited Pro Forma Consolidated Balance Sheet

 

(a)         Increase in cash reflects estimated cash proceeds upon completion of sale of IOC-Natchez, Inc.

(b)         Represents assets held for sale of IOC-Natchez, Inc. sold to Casino Holding Investment Partners, LLC under the terms of the purchase agreement, dated August 11, 2015.

(c)          Reflects accrued severance.

(d)         Application of purchase price deposit.

(e)          Includes accrued severance, but excludes expenses for legal and other third-party services utilized for the sale and closure process.

 

3.              Adjustments to Unaudited Pro Forma Consolidated Statement of Operations

 

(a)         The Company’s historical financial statements, as filed on Form 10-Q for the most recent interim three-month period ended July 26, 2015, presented the operating results for IOC — Natchez, Inc., as discontinued operations. The Company’s historical financial statements, as Filed on Form 10-K for the most recent fiscal year ended April 26, 2015 did not reflect the operating results for IOC — Natchez, Inc. as discontinued operations and therefore are presented with as reported and reclassifications to reflect IOC — Natchez, Inc. as discontinued operations.  No pro forma adjustments are necessary to present income (loss) from continuing operations on a pro forma basis.

 

Exhibit 99.2

 

 

Isle of Capri Casinos, Inc.

Closes Natchez, Mississippi Casino and

Completes Sale of Non-Gaming Assets

 

ST. LOUIS, Mo., October 19/PRNewswire/Isle of Capri Casinos, Inc. (NASDAQ: ISLE) announced that today it closed its casino in Natchez, Mississippi and completed the previously announced sale of certain non-gaming assets to Casino Holding Investment Partners, LLC, the parent company of Magnolia Bluffs Casino.

 

###

 

About Isle of Capri Casinos, Inc.

 

Isle of Capri Casinos, Inc. is a leading regional gaming and entertainment company dedicated to providing guests with an exceptional experience at each of the 14 casino properties that it owns and/or operates, primarily under the Isle and Lady Luck brands.  The Company currently owns and/or operates gaming and entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado, Pennsylvania and Florida. More information is available at the Company’s website, www.islecorp.com.

 

Forward-Looking Statement

 

This press release may be deemed to contain forward-looking statements, which are subject to change. These forward-looking statements may be significantly impacted, either positively or negatively by various factors, including without limitation, licensing, and other regulatory approvals, financing sources, development and construction activities, costs and delays, weather, permits, competition and business conditions in the gaming industry. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein.

 

Additional information concerning potential factors that could affect the Company’s financial condition, results of operations and expansion projects, is included in the filings of the Company with the Securities and Exchange Commission, including, but not limited to, its Form 10-K for the most recently ended fiscal year.

 

CONTACTS:

 

Isle of Capri Casinos, Inc.,

Eric Hausler, Chief Financial Officer-314.813.9327

Jill Alexander, Senior Director, Corporate Communications -314.813.9368

 

NOTE:  Other Isle of Capri Casinos, Inc. press releases and a corporate profile are available at http://www.prnewswire.com.  Isle of Capri Casinos, Inc.’s home page is http://www.islecorp.com.