New CFO may help ISLE turnaround

Dec 11, 2007 5:29 AM

Maybe a new chief financial officer is just what they need to turn things around. At least, that’s what Isle of Capri Casinos Inc. (ISLE) must be hoping.

During the fiscal second quarter that ended on Oct. 28, the company reported a loss of $24.6 million or $0.80 per share. In the comparable period, the company reported a loss of $4.2 million or $0.14 per share.

However, excluding one-time charges, the company’s most recent loss would have been $0.45 per share.

The majority of analyst had forecast that the company would report a loss of $0.04 per share.

Moving into the CFO’s role is Dale Black, whose most recent position has been with Trump Entertainment Resorts Inc. (TRMP). The addition of Black will be a sort of reunion since he will now be part of the team that includes James Perry and Virginia McDowell, both former Trump officials

In his comments, after announcing the company’s fiscal experience, Bernard Goldstein, chairman and CEO, noted that the company had "recorded a pre-tax charge of $6.5 million related to costs previously capitalized in connection with a proposed project in west Harrison County, Miss."

Also impacting the numbers, he said, were proposed expansions in Davenport, Iowa and Kansas City, Mo.

Of particular concern were losses incurred by the company’s gambling operations in the United Kingdom.

"Although we continue to see improvements in operating results at nearly all of our legacy properties, the Isle Casino at Coventry (England) continues to under perform," said McDowell, president and COO.

"We are currently streamlining our cost structures at Coventry and developing new marketing programs," she said.

Recently, London Clubs International, owned by Harrah’s Entertainment Inc. (HET) and Rank Holdings, one of the largest gaming companies in the U.K., reported declines in their gaming operations.

Analysts were generally mixed in their reviews of ISLE’s quarterly report. One analyst held out hope for a turnaround saying, "We believe the worst is behind Isle of Capri Casinos and the recent sell-off has created an attractive buying opportunity."

Nevada Gold

With the quarterly results impacted by both the sale of one gaming property and the prospective purchase of another, Nevada Gold & Casinos Inc. (UWN) reported results for the fiscal second quarter that ended on Oct. 28 that showed a reduction in its operating loss.

In last year’s second quarter, the company had revenues of $4.1 million and a loss of $6 million or $0.29 per share. This year, the revenues fell to $1.9 million and the loss decreased to $600,000 or $0.05 per share.

Sold was the company’s equity in the Isle of Capri Black Hawk, Colo., casino while the offer for a purchase was for the Horizon Casino Hotel in Vicksburg, Miss. The latter purchase from Columbia Properties Vicksburg was for $35 million.

The company also announced it had entered into an agreement with its senior lender to restructure its credit facility.