UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 30, 2000
OR
[ ] 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 333-38093
---------
ISLE OF CAPRI BLACK HAWK L.L.C. / ISLE OF CAPRI BLACK HAWK CAPITAL CORP.
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1422931
------------------- ----------------
(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. Yes x No
--
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PAGE
----
PART I
------
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS, JULY 30, 2000 (UNAUDITED)
AND APRIL 30, 2000. . . . . . . . . . . . . . . . . . . . . . 1
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED JULY 30, 2000 AND JULY 25, 1999 (UNAUDITED) 2
CONSOLIDATED STATEMENT OF MEMBERS' EQUITY FOR THE
THREE MONTHS ENDED JULY 30, 2000 (UNAUDITED). . . . . . . . . 3
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED JULY 30, 2000 AND JULY 25, 1999 (UNAUDITED) . . . . . . 4
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS. . . . . 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
--------
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. . . . . . . . . . . . . . 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . . . . . 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . 11
ITEM 5. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . 11
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT LIST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ISLE OF CAPRI BLACK HAWK L.L.C.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS July 30, April 30,
------ 2000 2000
------------ ----------
(Unaudited)
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . $ 9,636 $ 6,513
Accounts receivable:
Related parties . . . . . . . . . . . . . . . . . . . 12 4
Other . . . . . . . . . . . . . . . . . . . . . . . . 302 198
Prepaid expenses and other assets. . . . . . . . . . . . . 870 898
------------ ----------
Total current assets.. . . . . . . . . . . . . . 10,820 7,613
Property and equipment - net. . . . . . . . . . . . . . . . . . 104,094 98,711
Other assets:
Deferred financing costs, net of accumulated
amortization of $2,037 and $1,865, respectively . . . 2,812 2,984
Prepaid deposits and other . . . . . . . . . . . . . . . . 645 584
------------ ----------
Total assets.. . . . . . . . . . . . . . . . . . $ 118,371 $ 109,892
============ ==========
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
Current liabilities:
Current maturities of long-term debt.. . . . . . . . . . . $ 566 $ 768
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . . . . . 1,592 1,685
Related parties.. . . . . . . . . . . . . . . . . . . 6,952 4,731
Accrued liabilities:
Interest. . . . . . . . . . . . . . . . . . . . . . . 4,707 1,970
Construction payable. . . . . . . . . . . . . . . . . 1,339 1,096
Payroll and related.. . . . . . . . . . . . . . . . . 3,390 3,365
Property and other taxes. . . . . . . . . . . . . . . 1,933 1,919
Progressive jackpots and slot club awards.. . . . . . 2,084 1,964
Other.. . . . . . . . . . . . . . . . . . . . . . . . 1,154 1,002
------------ ----------
Total current liabilities. . . . . . . . . . . . 23,717 18,500
Long-term debt, less current maturities.. . . . . . . . . . . . 75,000 75,000
Members' equity:
Casino America of Colorado, Inc. . . . . . . . . . . . . . 10,409 8,550
Blackhawk Gold, Ltd. . . . . . . . . . . . . . . . . . . . 9,245 7,842
------------ ----------
Total members' equity. . . . . . . . . . . . . . 19,654 16,392
------------ ----------
Total liabilities and members' equity. . . . . . $ 118,371 $ 109,892
============ ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ISLE OF CAPRI BLACK HAWK L.L.C.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
Three Months Ended
------------------
July 30, July 25,
2000 1999
--------- ----------
Revenue:
Casino. . . . . . . . . . . . . . $ 24,456 $ 19,034
Food, beverage and other. . . . . 1,170 1,195
Rooms . . . . . . . . . . . . . . 52 -
--------- ----------
Total revenue. . . . . . . . 25,678 20,229
Operating expenses:
Casino. . . . . . . . . . . . . . 3,571 2,787
Rooms . . . . . . . . . . . . . . 69 -
Gaming taxes. . . . . . . . . . . 4,804 3,811
Food and beverage . . . . . . . . 860 871
Facilities. . . . . . . . . . . . 1,023 760
Marketing and administrative. . . 8,159 6,876
Management fees.. . . . . . . . . 1,019 860
Depreciation and amortization . . 574 508
--------- ----------
Total operating expenses . . 20,079 16,473
--------- ----------
Operating income. . . . . . . . . 5,599 3,756
Interest expense. . . . . . . . . (2,367) (2,706)
Interest income . . . . . . . . . 30 91
--------- ----------
Net income. . . . . . . . . . . . $ 3,262 $ 1,141
========= ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ISLE OF CAPRI BLACK HAWK L.L.C.
CONSOLIDATED STATEMENT OF MEMBERS' EQUITY
(UNAUDITED)
(IN THOUSANDS)
Casino America of Blackhawk Total
Colorado, Inc. Gold, Ltd. Members' Equity
------------------ ----------- ----------------
Balance, April 30, 2000. . . . . . . . . . $ 8,550 $ 7,842 $ 16,392
Net income. . . . . . . . . . . . . . 1,859 1,403 3,262
------------------ ----------- ----------------
Balance, July 30, 2000 . . . . . . . . . . $ 10,409 $ 9,245 $ 19,654
================== =========== ================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ISLE OF CAPRI BLACK HAWK L.L.C.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
Three Months Ended
--------------------
July 30, July 25,
2000 1999
---------- ----------
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,262 $ 1,141
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization.. . . . . . . . . . . . . . 574 508
Amortization of deferred financing costs. . . . . . . . . 172 171
Changes in current assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . . . (112) (21)
Prepaid expenses and other assets. . . . . . . . . . 28 (202)
Accounts payable and accrued liabilities . . . . . . 4,079 3,684
---------- ----------
Net cash provided by operating activities. . . . . . . . . . . 8,003 5,281
INVESTING ACTIVITIES:
Purchase of property and equipment.. . . . . . . . . . . . . . (4,617) (1,897)
Decrease in restricted cash. . . . . . . . . . . . . . . . . . - 1,429
Deposits and other . . . . . . . . . . . . . . . . . . . . . . (61) -
---------- ----------
Net cash used in investing activities. . . . . . . . . . . . . (4,678) (468)
FINANCING ACTIVITIES:
Principal payments on debt.. . . . . . . . . . . . . . . . . . (202) (181)
---------- ----------
Net cash used in financing activities. . . . . . . . . . . . . (202) (181)
Net increase in cash and cash equivalents. . . . . . . . . . . 3,123 4,632
Cash and cash equivalents at beginning of period . . . . . . . 6,513 10,917
---------- ----------
Cash and cash equivalents at end of period . . . . . . . . . . $ 9,636 $ 15,549
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest. . . . . . . . . . . . . . . . $ 115 $ 40
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Other:
Construction costs funded through accounts payable. . . . 1,339 -
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ISLE OF CAPRI BLACK HAWK L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
On April 25, 1997, Isle of Capri Black Hawk L.L.C. ("Isle-Black Hawk"), a
Colorado limited liability company, was formed. Isle-Black Hawk is owned by
Casino America of Colorado, Inc., a wholly-owned subsidiary of Isle of Capri
Casinos, Inc., and Blackhawk Gold, Ltd., a wholly-owned subsidiary of Nevada
Gold & Casinos, Inc. The principal purpose of Isle-Black Hawk has been to
develop and operate a casino in Black Hawk, Colorado, which opened December 30,
1998. Prior to December 30, 1998, Isle-Black Hawk was a Development Stage
Company and had not commenced gaming operations.
On August 20, 1997, Isle-Black Hawk and Isle of Capri Black Hawk Capital
Corp., a wholly-owned subsidiary of Isle-Black Hawk that has no operations,
issued $75.0 million of 13% First Mortgage Notes (the "First Mortgage Notes")
due 2004 with Contingent Interest in order to finance the construction and
development of Isle-Black Hawk.
The rights and obligations of Casino America of Colorado, Inc. and
Blackhawk Gold, Ltd. are governed in part by the Amended and Restated Operating
Agreement of Isle-Black Hawk (the "Agreement") dated as of July 29, 1997. The
Agreement provides that Isle-Black Hawk will continue until December 31, 2096,
or until such date that dissolution may occur. Pursuant to the Agreement,
Casino America of Colorado, Inc. contributed cash, land purchase rights and
development costs to Isle-Black Hawk and Blackhawk Gold, Ltd. contributed land
to Isle-Black Hawk.
On July 29, 1997, Casino America of Colorado, Inc., Isle of Capri Casinos,
Inc., Blackhawk Gold, Ltd., and Nevada Gold & Casinos, Inc. also entered into a
Members Agreement (the "Members Agreement") which addressed the development of
Isle-Black Hawk, management of Isle-Black Hawk, additional capital
contributions, and other matters. Casino America of Colorado, Inc. has an
ownership interest in Isle-Black Hawk of 57% and Blackhawk Gold, Ltd. has an
ownership interest in Isle-Black Hawk of 43%. Profits and losses of Isle-Black
Hawk are allocated in proportion to ownership interests.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
of normal recurring adjustments considered necessary for a fair presentation
have been included. Operating results for the three month period ended July 30,
2000, are not necessarily indicative of the results that may be expected for the
fiscal year ending April 29, 2001. For further information, refer to the
consolidated financial statements and footnotes thereto included in Isle-Black
Hawk's annual report on Form 10-K for the year ended April 30, 2000.
The consolidated financial statements of Isle-Black Hawk include the
accounts of Isle-Black Hawk and its subsidiary, Isle of Capri Black Hawk Capital
Corp. All material intercompany balances and transactions have been eliminated
in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles necessarily requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements as well as revenues and expenses during the reporting period. Actual
amounts when ultimately realized could differ from those estimates.
<PAGE>
ISLE OF CAPRI BLACK HAWK L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost except for land contributed by
Blackhawk Gold, Ltd., which is recorded at its appraised value. Depreciation
began accumulating upon the commencement of gaming operations and is computed
using the straight-line method over the following estimated useful lives:
<TABLE>
<CAPTION>
<S> <C>
YEARS
-----
Slot machines.. . . . . . . . . . . . . 3
Furniture, fixtures and equipment . . . 5-10
Buildings and improvements. . . . . . . 39.5
</TABLE>
3. OTHER ASSETS
Deferred Financing Costs
The costs of issuing long-term debt have been capitalized and are being
amortized using the effective interest method over the term of the related debt.
4. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
July 30, April 30,
2000 2000
--------------- ----------
(In thousands)
11% note payable, issued by Isle of Capri Black Hawk L.L.C.,
due March 2001; non-recourse to Isle of Capri Casinos, Inc . . . $ 566 $ 768
13% First Mortgage Notes, issued by Isle of Capri Black Hawk L.L.C.,
due August 2004; non-recourse to Isle of Capri Casinos, Inc. . . 75,000 75,000
--------------- ----------
75,566 75,768
Less: current maturities. . . . . . . . . . . . . . . . . . . . . . . 566 768
--------------- ----------
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000 $ 75,000
=============== ==========
</TABLE>
On August 20, 1997, Isle-Black Hawk issued $75.0 million of 13% First
Mortgage Notes with Contingent Interest, due August 31, 2004, that is
non-recourse debt to Isle of Capri Casinos, Inc. Interest on the First Mortgage
Notes is payable semi-annually on February 28 and August 31 of each year,
commencing February 28, 1998. Additionally, contingent interest is payable on
the First Mortgage Notes on each interest payment date, in an aggregate
principal amount of 5% of Isle-Black Hawk's Consolidated Cash Flow (as defined
in the Indenture), provided that no contingent interest was payable prior to
commencement of operations and may, under certain circumstances, be deferred.
In February 2000, Isle-Black Hawk made its first contingent interest payment
totaling $1.0 million as required by the Isle-Black Hawk's First Mortgage Notes.
The amount of contingent interest expense recorded for the three months ended
July 30, 2000 and July 25, 1999 was $310,000 and $218,000, respectively.
<PAGE>
ISLE OF CAPRI BLACK HAWK L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. LONG-TERM DEBT (CONTINUED)
The First Mortgage Notes are redeemable at the option of Isle-Black Hawk,
in whole or in part, at any time on or after August 1, 2001, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest to the redemption date, if redeemed during the
12-month period beginning on August 31 of the years indicated below:
<TABLE>
<CAPTION>
<S> <C>
Year Percentage
---- ----------
2001.. . . . . . . . . . . 106.500%
2002.. . . . . . . . . . . 103.200%
2003.. . . . . . . . . . . 100.000%
2004 and thereafter. . . . 100.000%
</TABLE>
On June 5, 2000, as required by the Indenture, the Isle-Black Hawk offered
to purchase for cash up to $1,246,000 principal amount of their 13% First
Mortgage Notes due in 2004 at a price of $1,010 per $1,000 principal amount,
plus interest accrued up to, but not including, the Payment Date in
accordance with the terms of its indenture. No Notes were tendered for
purchase. Isle Black-Hawk is required to make an offer based upon excess cash
flow every year during the term of the bonds.
Isle-Black Hawk obtained a letter of credit, as a requirement to obtain a
building permit from the City of Black Hawk (the "City"). The letter of
credit, totaling $2.1 million, can be drawn upon by the City if for any reason
Isle-Black Hawk fails to complete the hotel project; certain public
improvements are not completed; or for repair and maintenance on the public
improvements within one year after completion. The letter of credit is secured
by a deposit held in trust of $1.1 million, which was funded by Isle of Capri
Casinos, Inc., and the balance is secured by Isle of Capri Casinos, Inc.'s open
line of credit with the bank.
Substantially all of Isle-Black Hawk's assets are pledged as collateral for
long-term debt. At July 30, 2000, Isle-Black Hawk was in compliance with all
debt covenants.
5. RELATED PARTY TRANSACTIONS
Management Agreement
On April 25, 1997, Isle-Black Hawk entered into a Management Agreement,
which was subsequently amended and restated on July 29, 1997 (the "Management
Agreement"), with Isle of Capri Casinos, Inc., which manages the casino in
exchange for a fee. The management fee is equal to two percent of revenues as
defined, plus ten percent of operating income, but not to exceed four percent of
revenues. The management fee became effective upon commencement of casino
operations.
Lease Agreement
On January 2, 1998, Casino America of Colorado, Inc. acquired approximately
0.7 acres of property contiguous to the property being developed by Isle-Black
Hawk for expansion of the entrance and signage (the "Acquired Property"). On
January 2, 1998, Isle-Black Hawk, as lessee, entered into a lease agreement with
Casino America of Colorado, Inc. for the Acquired Property and had utilized the
Acquired Property in developing Isle-Black Hawk. The lease payment consisted of
$102,000 paid upon the inception of the lease and $17,000 per month, commencing
July 15, 1998 and continuing until December 31, 2002. The term of the lease was
through December 31, 2002, and thereafter on a year to year basis. During the
term of the lease, Isle-Black Hawk had the right to purchase the property for
$1,500,000 plus all interest and out-of-pocket costs that Casino America of
Colorado, Inc. incurred in connection with the purchase and ownership of the
land, less any payments made by Isle-Black Hawk, as lessee. On January 7, 2000,
Isle-Black Hawk purchased the property for $1.3 million representing the
purchase price of $1.5 million plus all interest and out-of-pocket costs that
Casino America of Colorado, Inc. incurred in connection with the purchase and
ownership of the land, less payments made by Isle-Black Hawk, as lessee.
<PAGE>
ISLE OF CAPRI BLACK HAWK L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
Loans
In August 2000, Isle-Black Hawk completed construction of its hotel
containing 237 rooms for approximately $29.0 million. Isle of Capri Casinos,
Inc. assisted Isle-Black Hawk by financing the development of this hotel and
loaned a total of $5.75 million.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with, and is
qualified in its entirety by, Isle-Black Hawk's financial statements, including
the notes thereto, and other financial information included elsewhere in this
report.
The following discussion includes "forward-looking statements" within the
meaning of section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. In particular,
statements concerning the effects of increased competition in the Black Hawk
market, the effects of regulatory and legislative matters, Isle-Black Hawk's
plans to make capital investments at its facility, including, without
limitation, the development of its hotel facility, are forward-looking
statements. Although Isle-Black Hawk believes that the expectations are
reasonable, there can be no assurance that such expectations are reasonable or
that they will be correct. Actual results may vary materially from those
expected. Important factors that could cause actual results to differ with
respect to Isle-Black Hawk's planned capital expenditures principally include a
lack of available capital resources, construction and development risks such as
shortages of materials and labor and unforeseen delays resulting from a failure
to obtain necessary approvals.
GENERAL
Isle-Black Hawk was organized on April 25, 1997 and from that time, until
the opening of the casino on December 30, 1998, Isle-Black Hawk's activities
were limited to the design, construction and opening of the casino. Isle-Black
Hawk includes a 43,000 square-foot gaming facility on a single floor with 1,145
slot machines, 12 table games, on-site covered parking for 1,100 vehicles, a 237
deluxe room hotel and various other amenities.
Isle of Capri Black Hawk Capital Corp. is a wholly-owned subsidiary of
Isle-Black Hawk and was incorporated for the sole purpose of serving as
co-issuer of the First Mortgage Notes. Isle of Capri Black Hawk Capital Corp.
has not and will not have any operations or material assets or revenues.
RESULTS OF OPERATIONS
Three Fiscal Months Ended July 30, 2000 Compared to Three Fiscal Months Ended
July 25, 1999
Total revenue for the quarter ended July 30, 2000 was $25.7 million, which
included $24.5 million of casino revenue and $1.2 million of food, beverage and
other revenue. This compares to total revenue for the prior year fiscal quarter
ended July 25, 1999 of $20.2 million, which included $19.0 million of casino
revenue and $1.2 million of food, beverage and other revenue. Revenue does not
reflect the retail value of any complimentaries.
Casino operating expenses for the quarter ended July 30, 2000 totaled $3.6
million, or 14.6% of casino revenue. This compares to casino operating expenses
for the prior year fiscal quarter ended July 25, 1999 of $2.8 million, or 14.6%
of casino revenue. These expenses are primarily comprised of salaries, wages
and benefits and other operating expenses of the casino.
State and local gaming taxes paid in Colorado totaled $4.8 million for the
quarter ended July 30, 2000, compared to $3.8 million for the quarter ended
July 25, 1999, which is consistent with the applicable Colorado's gaming tax
rate for the respective quarters.
Food, beverage and other expenses totaled $0.9 million for both the quarter
ended July 30, 2000 and the quarter ended July 25, 1999. These expenses consist
primarily of the cost of goods sold, salaries, wages and benefits and operating
expenses of these departments. Food, beverage and other operating expenses as a
percentage of food, beverage and other revenues were 73.5% for the quarter ended
July 30, 2000. This compares to food, beverage and other operating expenses as
a percentage of food, beverage and other revenues of 72.9% for the quarter ended
July 25, 1999.
<PAGE>
Facilities expenses totaled $1.0 million for the quarter ended July 30,
2000 as compared to $0.8 million for the quarter ended July 25, 1999. These
expenses include salaries, wages and benefits, operating expenses of insurance,
housekeeping and general maintenance of the facilities.
Marketing and administrative expenses totaled $8.2 million, or 31.7% of
total revenue, for the quarter ended July 30, 2000. This compares to marketing
and administrative expenses of $6.9 million, or 34.0% of total revenue, for the
quarter ended July 25, 1999. Marketing expenses include salaries, wages and
benefits of the marketing and sales departments, as well as promotions,
advertising, special events and entertainment. Administrative expenses include
administration and human resource department expenses, rent, professional fees
and property taxes.
Depreciation and amortization expense was $0.6 million and $0.5 million for
the quarters ended July 30, 2000 and July 25, 1999, respectively. These expenses
relate to property and equipment.
Interest expense was $2.4 million for the quarter ended July 30, 2000, net
of capitalized interest of $0.7 million. This compares to interest expense of
$2.7 million, net of capitalized interest of $0.2 million for the quarter ended
July 25, 1999. Interest expense primarily relates to indebtedness incurred in
connection with the acquisition of property, equipment and leasehold
improvements.
LIQUIDITY AND CAPITAL RESOURCES
At July 30, 2000 Isle-Black Hawk had cash and cash equivalents of $9.6
million as compared to cash and cash equivalents of $6.5 million as of April 30,
2000. The increase in cash is primarily a result of cash flows from operating
activities. During the quarter ended July 30, 2000, Isle-Black Hawk's operating
activities provided $8.0 million of cash as compared to the quarter ended
July 25, 1999, in which Isle-Black Hawk's operating activities provided $5.3
million of cash.
Isle-Black Hawk invested $4.7 million in property and equipment in the
quarter ended July 30, 2000, primarily for the completion of the hotel facility.
This compares with the $1.9 million invested by Isle-Black Hawk in property and
equipment in the quarter ended July 25, 1999.
Isle-Black Hawk completed construction of its hotel facility containing 237
rooms in August 2000. The facility cost approximately $29.0 million. Isle of
Capri Casinos, Inc. loaned $5.75 million to the Company.
Isle-Black Hawk anticipates that additional capital improvements
approximating $4.4 million will be made during fiscal 2001 to maintain its
existing facility and remain competitive in its market. Isle-Black Hawk has
spent $6.0 million for capital improvements during the three months ended July
30, 2000. Isle-Black Hawk expects that available cash and cash from future
operations will be adequate to fund future expansion, planned capital
expenditures, service debt and meet working capital requirements. There is no
assurance that Isle-Black Hawk will have the capital resources to make all of
the expenditures described above or that planned capital investments will be
sufficient to allow the Isle-Black Hawk to remain competitive in its existing
market. In addition, the indenture restricts, among other things, the Isle-Black
Hawk's ability to borrow money, make capital expenditures, use assets as
security in other transactions, make restricted payments or restricted
investments, incur contingent obligations, sell assets and enter into leases and
transactions with affiliates. In addition, Isle-Black Hawk is required to make
significant interest payments semi-annually on its First Mortgage Notes, which
will include additional contingent interest.
Isle-Black Hawk is highly leveraged and may be unable to obtain additional
debt or equity financing on acceptable terms. As a result, limitations on
Isle-Black Hawk's capital resources could delay or cause the abandonment of
certain plans for capital improvements.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a). Exhibits.
--------
A list of the exhibits included as part of this Form 10-K is set
forth in the Exhibit Index that immediately precedes such
exhibits, which is incorporated herein by reference.
(b) Reports on Form 8-K.
----------------------
During the quarter ended July 30, 2000, the Company filed the
following reports on Form 8-K:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 BLACK HAWK L.L.C.
<TABLE>
<CAPTION>
<S> <C>
Dated: September 13, 2000 /s/ Rexford A. Yeisley
-----------------------------------
Rexford A. Yeisley, Chief Financial Officer,
(Principal Financial and Accounting Officer)
</TABLE>
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
27 Financial Data Schedule
