Net income rises at Isle of Capri Casinos

Jun 28, 2005 4:15 AM

Excluding a loss sustained in the sale of a Colorado casino, Isle of Capri Casinos Inc. (ISLE) reported net income of $3.4 million or $0.22 per diluted share, easily topping the $4.3 million loss or $0.15 per share reported in the fourth quarter of 2004.

On April 25, the company completed the sale of the Colorado Grande-Cripple Creek casino and took a goodwill impairment charge of $2.9 million.

For the year, the company said net income was $18 million down from the prior fiscal year of $27.7 million.

Bernard Goldstein, company chairman and CEO, referred to the period as one of adjustment.

"We are coming close to completing most of the expansion projects at our core properties," he said. One of these projects is the new 400-room hotel expansion at the Isle-Biloxi that is expected to be completed by mid-summer. Also, the Isle-Black Hawk and the Colorado Central station casino expansion opened this during the current quarter, completing a $94 million construction and renovation project.

On a positive note, the company reported that the Broward County voters approved slots for its racetrack facility at Pompano Park and that a recent court ruling favored installation of the gaming machines by July 1. Still awaited are operating regulations and tax assessments that are supposed by to be made by state legislators.

Also, the company reported that the Illinois Gaming Board has renewed hearings on the status of the riverboat gaming license held by Emerald Casino Inc. "Due to continuing uncertainty with respect to this matter, the company recorded a valuation charge for the full amount of its $2.5 million investment in the license."

On another front, a gain of $2.3 million was recorded during the fourth quarter on the sale of an option that it had previously acquired related to the purchase of real estate in St. Louis, Mo.

GTECH Holdings

Seeing an end to its troubles in Brazil, where a year ago, the company faced allegations of bribing state officials during contract selections, GTECH Holdings Inc. (GTK), the world’s largest supplier of lottery systems and hardware reported a modest increase in earnings of 2% for the quarter that ended on May 27.

Revenues for the first quarter of fiscal 2006 were $326.4 million, a 16.5% increase over the $280.2 million reported in the first quarter of fiscal 2005 while net income was $54.8 million or $0.43 per diluted share compared to net income of $53.6 million or $0.40 per share. Gaming analysts had forecast earnings per share of $0.41.

"GTECH delivered another strong financial performance in this first quarter," said W. Bruce Turner, president and CEO.

"We also scored several key wins and made significant strategic progress. We are pleased to report that we also saw progress in Brazil in the first quarter where it appears we are one step closer to a resolution of what has been a difficult situation for GTECH." he said.

On the domestic front, the company received an order for 2,400 instant ticket vending machines from the Pennsylvania Department of Revenue and is in the process of negotiating the sale of 680 machines to the Hoosier Lottery of Indiana. Internationally, the company received a two-year contract extension from the Danish National Lottery and was granted an 18-year contract to operate the Barbados Lottery.

The company also has signed a strategic alliance arrangement with Harrah’s Entertainment Inc. (HET) to supply the gaming giant with slot machines.