<PAGE> 1
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): February 2, 1999
LAKES GAMING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 0-24993 41-1913991
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
130 CHESHIRE LANE, MINNETONKA, MINNESOTA 55305
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 449-9092
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
The Registrant's Press Release dated February 2, 1999, which is filed as
Exhibit 99.1 to this Form 8-K, the Registrant's Press Release dated March 10,
1999, which is filed as Exhibit 99.2 to this Form 8-K,and the registrant's Press
Release dated March 15, 1999, which is filed as Exhibit 99.3 to this Form 8-K
are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated February 2, 1999.
99.2 Press Release dated March 10, 1999.
99.3 Press Release dated March 15, 1999.
SIGNATURE
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.
LAKES GAMING, INC.
(Registrant)
Date: March 16, 1999 By: /s/ Timothy J. Cope
----------------------------
Name: Timothy J. Cope
Title: Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
99.1 Press Release Dated February 2, 1999.............. 4
99.2 Press Release Dated March 10, 1999................ 9
99.3 Press Release Dated March 15, 1999................ 11
-3-
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Exhibit 99.1
Lakes Gaming, Inc. (ticker: LACO, exchange: NASDAQ) News Release -
Tuesday, February 02, 1999
Lakes Gaming, Inc. Announces 1998 Year-End Results
Minneapolis, February 2, 1999 - Lakes Gaming, Inc. (Nasdaq "LACO") today
announced results for the 1998 fiscal year ended January 3, 1999, and
comparative prior year results for fiscal 1997. Revenues totaled $92.3 million
in 1998, compared with $78.5 million a year ago, an increase of 18 percent. Net
earnings for the year were $61.2 million, a 35 percent increase over net
earnings of $45.2 million for 1997. Basic and diluted earnings per common share
for 1998 increased to $5.80 and $5.71, respectively, compared with basic
earnings per common share of $4.32 for 1997 and diluted earnings per common
share of $4.20 for 1997. Approximately 10.6 million shares of Lakes common stock
are currently outstanding.
Commenting on the Company's performance, Lyle Berman, Chairman of the Board and
Chief Executive Officer of Lakes, said, "Our immediate focus at Lakes is to
continue to provide management expertise in order to maximize the profitability
of Grand Casino Avoyelles and Grand Casino Coushatta. Both casino resorts
performed well in 1998, surpassing our expectations. We look forward to
continuing work with our Tribal partners to further expand and enhance these two
premiere casino resorts."
Results from 1998 include $36.8 million in revenues from Grand Casinos'
management contracts for Grand Casino Mille Lacs and Grand Casino Hinckley that
concluded during 1998. Lakes revenues and earnings will not include
contributions from these operations going forward.
EBITDA (earnings before interest, taxes, depreciation, and amortization) for
1998 was $77.3 million, nearly 10 percent higher than $70.6 million in the prior
year. Corporate expenses increased in 1998 compared with 1997 because of legal,
professional, and other costs associated with separating Lakes from Grand
Casinos, Inc.
Lakes was formed on December 31, 1998, via a distribution of common shares to
the shareholders of Grand Casinos, Inc. Grand Casinos shareholders received .25
shares in Lakes for each share held in Grand Casinos. Concurrent with the
tax-free distribution of Lakes shares to Grand Casinos shareholders, and the
merger of Grand Casinos' Mississippi assets with Park Place Entertainment, Grand
Casinos shareholders also received one full share of Park Place Entertainment
Corporation (NYSE: PPE) for each share held in Grand Casinos.
Lakes operates the Indian casino management business and holds various other
assets previously owned by Grand Casinos, Inc. The Company's revenues are
derived from
<PAGE> 2
management fees. The casino resorts managed by Lakes are Grand Casino Avoyelles
and Grand Casino Coushatta. The casinos are managed under separate agreements on
behalf of two different Tribes. Both management contracts expire seven years
from the date the casino opened.
Opened on June 3, 1994, Grand Casino Avoyelles is located on Highway 1 in
Marksville, Louisiana. Grand Casino Avoyelles is a land-based facility with a
218-room hotel, and a 50,000-square-foot gaming floor offering approximately
1,700 slot machines, 50 table games, and an 11-table poker room. Among the
resort's other features include a 1,700-seat entertainment complex, three
restaurants plus a nightclub featuring live entertainment, a full-service RV
resort, and a Kids Quest child care activity center. Grand Casino Avoyelles is
owned by the Tunica-Biloxi Indians of Louisiana and managed by Lakes Gaming,
Inc.
Grand Casino Coushatta opened on January 16, 1995. Located east of Lake Charles,
25 minutes north of I-10 on US 165, approximately five miles north of Kinder,
Louisiana, Grand Casino Coushatta is a land-based casino resort offering a
223-room hotel and over 3,000 slot machines and over 75 table games, plus a
12-table poker room, in 98,000 square feet of gaming space. Three restaurants,
plus a food court, a full-service RV resort and a Kids Quest child care activity
center are among the property's non-gaming amenities. Grand Casino Coushatta is
owned by the Coushatta Tribe of Louisiana and managed by Lakes Gaming, Inc.
Lakes Gaming, Inc. is a publicly held casino management company that was formed
through a distribution to shareholders of Grand Casinos, Inc. effected in
December 1998. The company currently manages the two largest casino resorts in
Louisiana. Grand Casino Avoyelles is located in the central part of the state,
approximately 80 miles northwest of Baton Rouge. Grand Casino Coushatta is
located in southwestern Louisiana, near Interstate 10, approximately 160 miles
east of Houston. Lakes Gaming, Inc. common shares are traded on the Nasdaq Stock
Market under the trading symbol "LACO."
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 the Company) contains statements that are
forward-looking, such as statements relating to plan 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, those relating to development and
construction activities, dependence on existing management, domestic or global
economic conditions, activities of competitors and the presence of new or
additional competition, fluctuations and changes in customer preferences and
attitudes, changes in federal or state tax laws of the administration of such
laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions). For more information, review the Company's
filings with the Securities and Exchange Commission.
FOR FURTHER INFORMATION CONTACT:
Jaye Snyder 612-449-8556
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LAKES GAMING, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
January 3, December 28,
1999 1997
---- ----
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 39,435 $ 33,208
Current installments of notes receivable 8,561 6,654
Accounts receivable 15,217 6,425
Income taxes receivable - 14,785
Deferred income taxes 7,370 4,988
Other current assets 756 551
Total Current Assets 71,339 66,611
Property and Equipment-Net 1,265 3,071
Other Assets:
Land held for development 26,647 15,418
Notes receivable-less current
installments 25,118 26,477
Cash and cash equivalents-restricted 22,331 1,225
Investments in and notes from
unconsolidated affiliates 8,590 8,180
Casino development costs 4,846 4,144
Securities available for sale 1,033 4,842
Other long-term assets 200 2,125
Total Other Assets 88,765 62,411
Total Assets $161,369 $132,093
Liabilities and Shareholders' Equity
Current Liabilities:
Current installments of long-term debt - 13
Income taxes payable 6,811 2,000
Litigation and claims accrual 10,554 8,736
Other accrued expenses 4,625 180
Total Current Liabilities 21,990 10,929
Long-term Liabilities:
Long-term debt-less current installments 975 975
Deferred income taxes 2,733 1,391
Total Long-Term Liabilities 3,708 2,366
Total Liabilities 25,698 13,295
Commitments and Contingencies
Shareholders' Equity:
Capital stock, $.01 par value; authorized
100,000 shares; 106 -
common stock issued and outstanding 10,576 at
January 3, 1999
Additional paid-in-capital 134,929 -
Division equity - 121,745
Net unrealized gains (losses) on
securities available for sale 636 (2,947)
Total Shareholders' Equity 135,671 118,798
Total Liabilities and Shareholders' Equity $161,369 $132,093
</TABLE>
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LAKES GAMING, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except earnings per share)
<TABLE>
<CAPTION>
Twelve Months Ended
January 3, 1999
-------------------
<S> <C> <C>
Revenues
Management fee income $ 92,347 $ 78,515
Costs and Expenses:
Selling, general and
administrative 15,039 7,916
Depreciation and amortization 1,356 890
Total Costs and Expenses 16,395 8,806
Earnings From Operations 75,952 69,709
Other income (expense):
Interest income 5,601 5,940
Interest expense (98) (98)
Other (4,464) (825)
Total other income, net 1,039 5,017
Earnings before income taxes 76,991 74,726
Provision for income taxes 15,811 29,523
Net Earnings $ 61,180 $ 45,203
Basic Earnings per Share $ 5.80 $ 4.32
Diluted Earnings per Share $ 5.71 $ 4.20
Weighted Average Common Shares
Outstanding 10,550 10,475
Weighted Average Common and Diluted
Shares Outstanding 10,712 10,759
</TABLE>
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: Statements in this
press release regarding Lakes Gaming, Inc.'s
business which are not historical facts are
"forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to
differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's
Annual Report or Form 10-K for the most recently
ended fiscal year.
<PAGE> 1
Exhibit 99.2
Lakes Gaming, Inc. (ticker: LACO, exchange: NASDAQ) News Release -
Wednesday, March 10, 1999
Lakes Gaming, Inc. Announces Planned Venture with Casino Resource Corporation
MINNEAPOLIS--(BUSINESS WIRE)--March 10, 1999--Lakes Gaming, Inc. (NASDAQ:LACO)
today announced that they have entered into a Memorandum of Understanding with
Casino Resource Corporation (Nasdaq "CSNR") to form a joint venture for the
purpose of submitting to the Pokagon Band of Potawatomi Indians, (the "Band") a
proposal to oversee the development, construction and management of a casino
gaming resort facility for the Band in the State of Michigan. Lakes will own 80%
of the joint venture and will be the managing partner with full authority to act
in the best interest of the venture.
Lakes Gaming, Inc. is a publicly held casino management company that was formed
through a distribution of its common stock to shareholders of Grand Casinos,
Inc. effected in December 1998. The company currently manages the two largest
casino resorts in Louisiana. Grand Casino Avoyelles is located in the central
part of the state, approximately 80 miles northwest of Baton Rouge. Grand Casino
Coushatta is located in southwestern Louisiana, near Interstate 10,
approximately 160 miles east of Houston. Lakes Gaming, Inc. common shares are
traded on the Nasdaq Stock Market under the trading symbol LACO.
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 the Company) contains statements that are
forward-looking, such as statements relating to plan
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, those
relating to development and construction activities,
dependence on existing management, leverage and debt
service (including sensitivity to fluctuations in the
interest rates), domestic or global economic
conditions, activities of competitors and the presence
of new or additional competition, fluctuations and
changes in customer
<PAGE> 2
preferences and attitudes, changes in federal or state
tax laws of the administration of such laws and
changes in gaming laws or regulations (including the
legalization of gaming in certain jurisdictions). For
more information, review the Company's filings with
the Securities and Exchange Commission, including the
Company's annual report on Form 10-K and certain
registration statements of the Company.
CONTACT: Lakes Gaming, Inc., Minnetonka
Jaye Snyder 612-449-8556
www.lakesgaming.com
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: Statements in this
press release regarding Lakes Gaming, Inc.'s
business which are not historical facts are
"forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to
differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's
Annual Report or Form 10-K for the most recently
ended fiscal year.
<PAGE> 1
[LAKES GAMING, INC. LETTERHEAD]
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FOR FURTHER INFORMATION CONTACT:
Jaye Snyder 612-449-8556
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FOR IMMEDIATE RELEASE:
MONDAY, MARCH 15, 1999
LAKES GAMING, INC. ANNOUNCES APPELLATE COURT
AFFIRMANCE OF DERIVATIVE LAWSUIT DISMISSAL
MINNEAPOLIS, MARCH 15, 1999 - LAKES GAMING, INC. (NASDAQ "LACO") today announced
that the Minnesota Court of Appeals has affirmed a lower court's dismissal of a
shareholder derivative lawsuit previously brought against certain former
officers and directors of Grand Casinos, Inc.
The lawsuit, originally filed in February 1997, alleged breach of fiduciary
duties by certain former officers and directors of Grand Casinos in connection
with Grand Casinos' involvement in Stratosphere Corporation. The Grand Casinos
Board of Directors appointed an independent special litigation committee, which
evaluated the claims and recommended in December 1997 that such claims not be
pursued. In May 1998, the trial court dismissed the lawsuit, and the Minnesota
Court of Appeals has now affirmed that dismissal.
Under the terms of the agreement governing the spin-off of Lakes from Grand
Casinos in December 1998, Lakes agreed to assume all litigation liabilities
associated with Grand Casinos' former investment in Stratosphere Corporation,
and to indemnify Grand Casinos, and its former officers and directors against
claims arising from the Stratosphere litigation.
Commenting on the dismissal, Lyle Berman, chairman of the board and chief
executive officer of Lakes, and former chairman of the board of Grand Casinos,
said, "Both Lakes and Grand Casinos have indicated their commitment to defend
Grand Casinos and its former officers and directors vigorously in connection
with the Stratosphere litigation. We have continually stated that the lawsuits
are without merit and we are naturally pleased with the court's decision."
The plaintiffs have until April 8, 1999, to seek further review of the ruling by
the Minnesota Supreme Court.
(more)
<PAGE> 2
Lakes Gaming, Inc. is a publicly held casino management company that was formed
through a distribution to shareholders of Grand Casinos, Inc. effected in
December 1998. The company currently manages the two largest casino resorts in
Louisiana. Grand Casino Avoyelles is located in the central part of the state,
approximately 80 miles northwest of Baton Rouge. Grand Casino Coushatta is
located in southwestern Louisiana, near Interstate 10, approximately 160 miles
east of Houston. Lakes Gaming, Inc. common shares are traded on the Nasdaq Stock
Market under the trading symbol "LACO."
- --------------------------------------------------------------------------------
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 the Company) contains statements that are
forward-looking, such as statements relating to plan 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, those relating to development and
construction activities, dependence on existing management, domestic or global
economic conditions, activities of competitors and the presence of new or
additional competition, fluctuations and changes in customer preferences and
attitudes, changes in federal or state tax laws of the administration of such
laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions). For more information, review the Company's
filings with the Securities and Exchange Commission.
- --------------------------------------------------------------------------------
###
