<PAGE>
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 January 31, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________________________________
Commission File Number: 0-20538
Casino America, Inc.
(Exact name of registrant as specified in its charter)
Delaware 41-1659606
(State of Incorporation) (IRS Employer Identification No.)
711 Washington Loop, Second Floor, Biloxi, Mississippi 39530
(Address of principal executive offices) (Zip Code)
(601) 436-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (a) 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 (b) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
-----
Shares of Common Stock outstanding at March 6, 1997: 23,331,687
<PAGE>
CASINO AMERICA, INC.
FORM 10-Q
INDEX
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets,
January 31, 1997 (unaudited) and
April 30, 1996 1-2
Consolidated Statements of
Operations for the Three Months
and Nine Months Ended
January 31, 1997 and 1996
(unaudited) 3
Consolidated Statements of
Cash Flows for the Nine Months
Ended January 31,1997 and 1996
(unaudited) 4-5
Consolidated Statement of
Stockholders' Equity
(unaudited) 6
Notes to Unaudited Consolidated
Financial Statements 7-11
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 12-18
Part II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of
Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
EXHIBIT LIST 21
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 31, 1997 APRIL 30, 1996
---------------- --------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 38,822,000 $ 18,585,000
Accounts receivable:
Related parties 323,000 3,171,000
Other 4,806,000 1,764,000
Income taxes receivable 11,231,000 --
Deferred income taxes 2,057,000 1,001,000
Prepaid expenses and other assets 5,105,000 2,858,000
------------ ------------
TOTAL CURRENT ASSETS 62,344,000 27,379,000
------------ ------------
PROPERTY AND EQUIPMENT:
Land improvements 33,152,000 25,485,000
Leasehold improvements 96,170,000 50,130,000
Buildings and improvements 9,384,000 6,099,000
Riverboats and floating pavilions 124,886,000 33,591,000
Furniture, fixtures and equipment 79,894,000 35,835,000
Construction in progress 1,340,000 375,000
------------ ------------
344,826,000 151,515,000
Less: Accumulated depreciation 52,614,000 22,209,000
------------ ------------
Property and equipment, net 292,212,000 129,306,000
------------ ------------
OTHER ASSETS:
Investment in and advances to joint ventures -- 34,281,000
Notes receivable - related party -- 4,700,000
Other investments 2,250,000 2,250,000
Property held for development or sale 15,822,000 15,840,000
Licenses, goodwill, and other intangible assets
net of accumulated amortization of
$3,249,000 and $-0-, respectively 114,484,000 --
Berthing, concession and leasehold rights, net of
accumulated amortization of $1,444,000 and
$1,209,000, respectively 4,825,000 5,060,000
Deferred financing costs, net of accumulated
amortization of $777,000 and $1,229,000,
respectively 11,878,000 4,327,000
Prepaid expenses 809,000 743,000
Deposits and other 1,805,000 2,588,000
------------ ------------
151,873,000 69,789,000
------------ ------------
TOTAL ASSETS $506,429,000 $226,474,000
============ ============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 1997 APRIL 30, 1996
---------------- --------------
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 14,983,000 $ 8,884,000
Accounts payable:
Trade 6,799,000 6,169,000
Accrued liabilities:
Interest 426,000 5,802,000
Payroll and related 14,002,000 6,333,000
Property and other taxes 2,769,000 6,880,000
Progressive jackpots and slot
club awards 5,737,000 1,851,000
Other 2,549,000 2,392,000
------------ ------------
TOTAL CURRENT LIABILITIES 47,265,000 38,311,000
------------ ------------
LONG-TERM DEBT, NET OF CURRENT
MATURITIES 366,678,000 130,894,000
DEFERRED INCOME TAXES 6,999,000 6,999,000
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value;
2,000,000 shares
authorized; none issued -- --
Common stock, $0.01 par value;
45,000,000 shares authorized;
shares issued and outstanding:
23,326,787 and 16,038,882,
respectively 233,000 160,000
Class B common stock, $0.01 par value;
3,000,000 shares authorized; none
issued -- --
Additional paid-in capital 62,525,000 13,857,000
Retained earnings 22,729,000 36,253,000
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 85,487,000 50,270,000
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $506,429,000 $226,474,000
============ ============
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended January 31, Nine Months Ended January 31,
1997 1996 1997 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
REVENUE:
Casino $ 95,812,000 $31,445,000 $227,910,000 $ 90,300,000
Rooms 2,562,000 1,481,000 9,002,000 2,969,000
Management fee - joint ventures -- 1,583,000 2,110,000 4,351,000
Pari-mutuel commissions and fees 6,425,000 6,113,000 12,089,000 8,938,000
Food, beverage and other 5,586,000 2,338,000 14,433,000 4,969,000
------------ ----------- ------------ ------------
TOTAL REVENUE 110,385,000 42,960,000 265,544,000 111,527,000
------------ ----------- ------------ ------------
OPERATING EXPENSES:
Casino 17,915,000 7,621,000 46,075,000 20,360,000
Rooms 961,000 775,000 3,362,000 2,004,000
Gaming taxes 18,610,000 3,967,000 41,839,000 11,104,000
Pari-mutuel 5,054,000 2,408,000 10,362,000 6,221,000
Food, beverage and other 3,099,000 1,251,000 10,698,000 3,722,000
Marine and facilities 5,265,000 3,320,000 14,685,000 7,096,000
Marketing and administrative 38,573,000 15,637,000 93,722,000 41,401,000
Preopening expenses -- -- 2,500,000 1,290,000
One-time charge -- 11,798,000 -- 11,798,000
(Gain) loss on disposal of equipment (53,000) 795,000 (53,000) 1,121,000
Depreciation and amortization 7,682,000 2,703,000 19,130,000 8,230,000
------------ ----------- ------------ ------------
TOTAL OPERATING EXPENSES 97,106,000 50,275,000 242,320,000 114,347,000
------------ ----------- ------------ ------------
OPERATING INCOME (LOSS) 13,279,000 (7,315,000) 23,224,000 (2,820,000)
INTEREST EXPENSE (12,575,000) (4,464,000) (29,219,000) (11,189,000)
INTEREST INCOME:
Related parties -- 160,000 203,000 590,000
Other 1,027,000 44,000 1,371,000 430,000
EQUITY IN INCOME OF UNCONSOLIDATED JOINT VENTURES -- 2,931,000 4,534,000 12,207,000
------------ ----------- ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM 1,731,000 (8,644,000) 113,000 (782,000)
INCOME TAX PROVISION (BENEFIT) 962,000 (2,097,000) 1,384,000 1,387,000
------------ ----------- ------------ ------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 769,000 (6,547,000) (1,271,000) (2,169,000)
EXTRAORDINARY ITEM (NET OF TAXES) -- -- (12,253,000) --
------------ ----------- ------------ ------------
NET INCOME (LOSS) $ 769,000 $(6,547,000) $(13,524,000) $ (2,169,000)
============ =========== ============ ============
INCOME (LOSS) PER SHARE BEFORE EXTRAORDINARY ITEM $0.03 ($0.44) ($0.06) ($0.14)
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE $0.03 ($0.44) ($0.61) ($0.14)
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES 23,330,000 14,972,000 22,218,000 15,580,000
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended January 31,
1997 1996
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (13,524,000) $ (2,169,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 19,774,000 9,054,000
Deferred income taxes -- (383,000)
Equity in income of unconsolidated joint ventures (4,534,000) (12,207,000)
Extraordinary loss on retirement of debt (net of taxes) 12,253,000 --
(Gain) Loss on disposal of equipment (53,000) 1,121,000
Stock issued for compensation 215,000 88,000
One-time charge -- 11,798,000
Changes in current assets and liabilities (net of acquisitions):
Accounts receivable (793,000) (872,000)
Income tax receivable (4,633,000) 1,189,000
Prepaid expenses and other (1,121,000) 190,000
Accounts payable 3,356,000 (4,330,000)
Accrued liabilities (11,781,000) (583,000)
------------- ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITITIES (841,000) 2,896,000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (13,411,000) (23,731,000)
Purchases of property held for development or sale -- (2,697,000)
Net cash paid for acquisitions (81,168,000) --
Proceeds from disposals of property and equipment 594,000 2,770,000
Repayments from joint ventures -- 2,300,000
Distributions from joint ventures -- 724,000
Decrease in restricted cash -- 12,171,000
Other 1,388,000 274,000
------------- ------------
NET CASH USED IN INVESTING ACTIVITIES (92,597,000) (8,189,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 317,698,000 9,251,000
Principal payments on borrowings and cash paid to retire debt (209,656,000) (13,731,000)
Deferred financing costs (12,724,000) (784,000)
Proceeds from sale of stock and exercise of options 18,357,000 541,000
------------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 113,675,000 (4,723,000)
------------- ------------
Net increase (decrease) in cash and cash equivalents 20,237,000 (10,016,000)
Cash and cash equivalents at beginning of period 18,585,000 18,997,000
------------- ------------
Cash and cash equivalents at end of period $ 38,822,000 $ 8,981,000
============= ============
</TABLE>
(CONTINUED)
4
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended January 31,
1997 1996
-----------------------------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash payments for:
Interest, net of amounts capitalized $ 35,901,000 $ 13,104,000
Income taxes, net of refunds received 8,256,000 (341,000)
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Notes payable and debt issued for:
Land -- 1,726,000
Property and equipment 514,000 3,713,000
Insurance premiums 573,000 552,000
Acquisitions:
Debt assumed (37,142,000) --
Debt issued (90,328,000) --
Stock issued (27,669,000) --
Warrants issued (2,500,000) --
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
CASINO AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Shares of Additional Total
Common Common Paid-In Retained Stockholders'
Stock Stock Capital Earnings Equity
---------- ---------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C>
BALANCE, APRIL 30, 1996 16,038,882 $160,000 $13,857,000 $ 36,253,000 $ 50,270,000
Issuance of common
stock 7,179,980 72,000 45,701,000 45,773,000
Issuance of warrants 2,500,000 2,500,000
Exercise of stock options 65,625 1,000 252,000 253,000
Issuance of common stock
for compensation 42,300 215,000 215,000
Net loss (13,524,000) (13,524,000)
---------- -------- ----------- ------------ -------------
BALANCE, JANUARY 31, 1997 23,326,787 $233,000 $62,525,000 $ 22,729,000 $ 85,487,000
========== ======== =========== ============ =============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE>
CASINO AMERICA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
Casino America, Inc. (the "Company") was incorporated as a Delaware
corporation on February 14, 1990. The Company, through its
subsidiaries, is engaged in the business of developing, owning and
operating riverboat and dockside casinos and related facilities. The
Company has licenses to conduct gaming operations in Biloxi and
Vicksburg, Mississippi, and in Bossier City and Lake Charles, Louisiana
through its subsidiaries.
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 nine-month period ended January 31,
1997 are not necessarily indicative of the results that may be expected
for the year ending April 30, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended
April 30, 1996.
Licenses, Goodwill and Other Intangible Assets
Licenses, goodwill and other intangible assets principally represent
the excess purchase price the Company paid in acquiring the net
identifiable tangible assets of St. Charles Gaming Company, Inc.
("SCGC"), Grand Palais Riverboat, Inc. ("GPRI") and Louisiana Riverboat
Gaming Partnership ("LRGP"). The license costs included in this line,
reflect the value attributed to the Louisiana gaming licenses acquired
through these purchases. The remaining intangible asset balance has
been classified as goodwill and other intangible assets. The Company
began amortizing these costs from the effective date of each related
acquisition or commencement of operations in the case of GPRI, over a
twenty-five-year period using the straight-line method. The Company is
currently in the process of finalizing its allocation of purchase price
related to these acquisitions.
Impact of Recently Issued Accounting Standards
In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of, which requires impairment losses to be recorded on long-
lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by
those assets are less than the assets carrying amount. Statement 121
also addresses the accounting for long-lived assets that are expected
to be disposed of. The Company adopted Statement 121 in fiscal 1997 and
there was no material effect of adoption.
7
<PAGE>
Reclassifications
Certain prior period amounts have been reclassified to conform with the
current presentation.
Note 2. Business Acquisitions
Purchase of GPRI and SCGC
On May 3, 1996, the Company purchased all of the outstanding shares of
common stock of GPRI in a bankruptcy proceeding (the "GPRI
Acquisition"). Pursuant to the Plan of Reorganization adopted in such
bankruptcy proceeding, the Company purchased 100% of the shares of the
reorganized GPRI, which at the time of closing owned the Grand Palais
riverboat casino, gaming equipment, certain other furniture, fixtures
and equipment, all necessary gaming licenses issued by the State of
Louisiana, and other permits and authorizations. Commencing July 12,
1996, the Company began operating the GPRI vessel as part of a two-
riverboat operation with the SCGC vessel (collectively, the two vessel
operation is referred to as the "Isle-Lake Charles"). The aggregate
consideration paid by the Company in connection with the GPRI
Acquisition was approximately $61.5 million, consisting of cash in the
amount of approximately $8.2 million, notes and the assumption of
indebtedness of approximately $37.1 million, 2,250,000 shares of common
stock, and warrants to purchase an additional 500,000 shares of common
stock at an exercise price of $10 per share.
At the time of the GPRI Acquisition, the Company also purchased,
through a separate transaction, the remaining 50% interest in SCGC not
already owned by LRGP (the "SCGC Acquisition"), in exchange for
1,850,000 shares of the Company's common stock and a five-year warrant.
The warrant allows the seller to convert up to $5,000,000 of its note
receivable from the Company to 416,667 shares of common stock of the
Company. The purchase agreement also provides for the restructuring of
certain indebtedness owed to the seller.
LRGP Acquisition
On August 6, 1996, the Company acquired the remaining 50% interest in
Louisiana Riverboat Gaming Partnership ("LRGP") and LRG Hotels, L.L.C.
held by Louisiana River Site Development, Inc. (the "LRGP
Acquisition"). The consideration for the LRGP Acquisition included (i)
$85 million in cash, (ii) five-year warrants to purchase 500,000 shares
of Common Stock at an exercise price of $10.50 per share and (iii) $1.5
million per year for seven years, payable monthly beginning on
October 1, 1998.
The SCGC Acquisition, the LRGP Acquisition and the GPRI Acquisition
have been accounted for by the Company using the purchase method of
accounting, and the Company's proportionate share of the results of
operations for each of the acquired companies has been included in the
Company's results of operations from the respective dates of
acquisition. Total intangible assets related to the above acquisitions
were approximately $116.1 million. The allocation of the purchase
prices for these acquisitions has been performed on a preliminary basis
and is subject to further analysis and revisions.
8
<PAGE>
Pro forma Information
The following unaudited pro forma condensed consolidated financial
information for the nine months ended January 31, 1997 gives effect to
the SCGC Acquisition, the LRGP Acquisition, and the GPRI Acquisition,
as if such transactions had occurred on May 1, 1996. The unaudited pro
forma condensed consolidated financial information for the nine months
ended January 31, 1996 gives effect to LRGP's purchase of a 50%
interest in SCGC on June 9, 1995, the SCGC Acquisition, the LRGP
Acquisition and the GPRI Acquisition, as if such transactions had
occurred on May 1, 1995.
Nine Months Ended January 31,
1997 1996
------------- -------------
Total revenue $330,988,000 $259,154,000
Operating income 34,092,000 21,435,000
Net loss (1,917,000) (8,279,000)
Net loss per common and
common equivalent share $ (.08) $ (.42)
The pro forma financial information presented above does not purport to
be indicative of the results of operations that actually would have
been achieved if the operations were combined during the periods
presented nor is it intended to be a projection of results or trends.
Because the Company is consolidating LRGP and SCGC for reporting
periods subsequent to the date of the LRGP Acquisition, the pro forma
financial information has been presented on a consolidated basis.
The pre-bankruptcy business of GPRI consisted entirely of developing
and operating the Grand Palais riverboat casino in New Orleans,
Louisiana. The Grand Palais began gaming operations in New Orleans on
March 29, 1995 and, due to poor operating results, ceased operations on
June 6, 1995. GPRI was forced into involuntary bankruptcy on
July 26, 1995 and was completely non-operational between June 6, 1995
and the subsequent reopening of the Grand Palais at the Isle-Lake
Charles on July 12, 1996. Other than amortization of the related
intangible assets and interest on debt incurred to effect the GPRI
Acquisition, adjustments related to the pre-bankruptcy operations of
GPRI have not been included in the pro forma results of operations for
the nine months ended January 31, 1996 because the pre-bankruptcy
operations of GPRI were very limited and substantially different than
the post-acquisition operations.
Note 3. Operating Expenses
The Isle of Capri Casino in Biloxi, Mississippi, (the "Isle-Biloxi"),
which originally opened on August 1, 1992, underwent a substantial
reconfiguration of its existing casino complex and opened a new hotel
and pavilion on August 1, 1995. The Company incurred $1,290,000 of
preopening expenses in connection with the opening of this expanded
facility during the three-month period ended October 31, 1995.
On July 12, 1996, GPRI commenced operations as part of a two-boat
operation and recently expanded pavilion at the Isle-Lake Charles. The
Company incurred $2,500,000 of preopening expenses in connection with
the opening of GPRI during the nine-month period ended
January 31, 1997.
9
<PAGE>
Note 4. Long-term Debt
On August 6, 1996, the Company issued $315,000,000 of 12-1/2% Senior
Secured Notes due 2003 (the "Senior Secured Notes"). Interest on the
Senior Secured Notes is payable semiannually on each February 1, and
August 1, commencing February 1, 1997, through maturity. The Company
made its first interest payment on the Senior Secured Notes on
January 30, 1997.
The Senior Secured Notes are redeemable at the option of the Company,
in whole or in part, on or after August 1, 2000, at the redemption
prices set forth in the indenture pursuant to which the Senior Secured
Notes were issued (the "Indenture"), plus accrued interest.
The Company's obligations under the Senior Secured Notes and the
Indenture are jointly, severally and unconditionally guaranteed (the
"Subsidiary Guarantees" ) on a senior secured basis by all existing and
future Significant Restricted Subsidiaries (as defined in the
Indenture) of the Company, subject to the receipt of the required
approval of any applicable Gaming Authority. The obligations arising
under the Subsidiary Guarantees are guaranteed by the Company.
The Notes are secured by a first priority Lien on substantially all of
the assets of the Company, and the Subsidiary Guarantees are secured by
a first priority Lien on substantially all of the tangible assets of
the Subsidiary Guarantors (as defined in the Indenture), other than (i)
the Isle-Biloxi Hotel, the Grand Palais and Pompano Park, as to which
junior priority liens have been granted, and (ii) excluded assets (as
defined in the Indenture).
The Indenture contains certain covenants with respect to, among others,
the following matters: (i) limitation on indebtedness, (ii) limitation
on liens, (iii) limitation on restricted payments, (iv) limitation on
dividends and other payment restrictions affecting affiliates, (v)
limitation on asset sales and events of loss, (vi) limitation on
disposition of stock of Restricted Subsidiaries, (vii) limitation on
transactions with affiliates and (viii) restrictions on consolidations,
mergers and transfers of assets.
Part of the proceeds from the Senior Secured Notes were used to retire
or defease $180,285,000 in long-term debt, including $105,000,000 of
11-1/2% First Mortgage Notes due 2001. The proceeds were also used to
pay accrued interest and other costs of $16,396,000, as well as to
consummate the LRGP Acquisition.
Note 5. Common Stock
The Company's Board of Directors authorized the offering, on a pro-rata
basis, of rights (the "Rights Offering") to purchase shares of the
Company's common stock at a price of $5.875 per share at a ratio of
approximately one share for every four shares owned to certain of its
shareholders of record on March 15, 1996. The proceeds from the
issuance of 3,079,980 shares of common stock from the Rights Offering
were approximately $18,049,000, net of issuance costs of approximately
$46,000.
Note 6. Extraordinary Item
The Company incurred extraordinary costs totaling $18,857,000 related
to the refinancing of its 11.5% First Mortgage Notes and other debt in
early August of 1996. The extraordinary cost included early payment
premiums, as well as the write-
10
<PAGE>
off of consent fees and debt acquisition costs. The tax benefit from
the extraordinary loss was $6,604,000.
Note 7. Subsequent Event
On February 7, 1997, the Company's Board of Directors adopted a
Stockholder Rights Plan (the "Plan") and, in accordance with such Plan,
each stockholder will receive a distribution of one Right for each
share of the Company's outstanding common stock. Each Right entitles
the holder to purchase one one-thousandth (1/1000) of a share of a new
series of participating preferred stock at an initial exercise price of
$12.50.
Initially, the Rights are represented by the Company's common stock
certificates and are not exercisable. The Rights become exercisable
shortly after a person or group acquires beneficial ownership of 15% or
more of Casino America, Inc.'s common stock or publicly announces its
intention to commence a tender or exchange offer that would result in
that beneficial ownership level.
Under certain circumstances involving a buyer's acquisition of a 15%
position in the Company, all Rights holders except the buyer will be
entitled to purchase common stock at half price. If the Company is
acquired in a merger after such acquisition, all Rights holders except
the buyer will also be entitled to purchase stock in the buyer at half
price. Casino America, Inc. may redeem the Rights at one cent each at
any time before a buyer acquires 15% of the Company's common stock. The
Rights became distributable to shareholders of record on March 3, 1997
and will expire 10 years thereafter.
Note 8. Contingencies
The Louisiana Gaming Control Board has requested information from the
Company regarding certain jackpots (the "Jackpots") paid at the Isle-
Bossier City and at the Isle-Lake Charles which were deducted for
purposes of computing taxable gaming revenue. At issue is the validity
and applicability of a Louisiana State Police regulation which purports
to make certain jackpots non-deductible for purposes of computing
taxable gaming revenue. If the regulation is ultimately determined to
be valid and applicable to the Jackpots paid by the Isle-Bossier City
and the Isle-Lake Charles, additional gaming taxes aggregating
approximately $7.0 million plus penalties and interest could be
assessed against the Company. To date, no assessment has been made,
and, based upon the advice of counsel, the Company believes that no
such taxes are owed. Should an assessment be forthcoming, the Company
intends to contest any such assessment through appropriate
administrative and legal proceedings.
11
<PAGE>
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, the unaudited consolidated financial statements, including the
notes thereto, 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 Company's
markets, the Company's plans to make capital investments at its facilities,
including, without limitation, considerations to develop hotels at the Isle-
Bossier City and the Isle-Lake Charles and the expansion of non-gaming amenities
at all facilities, are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements 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 the Company'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, and the Company's limited experience in
developing hotel operations. Other important factors that could cause the
Company's actual results to differ materially from expectations are discussed
under "Risk Factors" in the prospectus dated August 1, 1996 relating to the
issuance of the Company's Senior Secured Notes.
GENERAL
The Company's results of operations for the three months ended January 31, 1997
reflect the consolidated operations from all of the Company's subsidiaries,
including the Isle-Biloxi, the Isle-Lake Charles, Isle of Capri Casino in
Vicksburg, Mississippi (the "Isle-Vicksburg"), the Isle of Capri Casino in
Bossier City, Louisiana (the "Isle-Bossier City") and Pompano Park, Inc.
("PPI"). The LRGP Acquisition, consummated August 6, 1996, gave the Company
100% ownership in the Isle-Bossier City and the Isle-Lake Charles, allowing the
Company to consolidate their results of operations beginning in the quarter
ended October 31, 1996. Previously, the Company reported its interests in the
Isle-Bossier City and the Isle-Lake Charles using the equity method of
accounting. The Company believes that its results of operations for the three
and nine months ended January 31, 1997 are not readily comparable to the results
of operations for the three and nine months ended January 31, 1996 primarily
because of the consolidation of the results of operations of the Isle-Bossier
City and the Isle-Lake Charles. Furthermore, the historical results of
operations reflect the Isle-Lake Charles as a single riverboat operation,
whereas the Isle-Lake Charles has operated two riverboats since July 12, 1996 as
a result of the GPRI Acquisition. In addition, the land-based pavilion at the
Isle-Lake Charles was recently expanded, and the three months ended October 31,
1996 was the first full quarter of operating results for GPRI. Because of the
lack of comparable information on a consolidated basis, the following discussion
will focus on certain events and trends that affected the Company's consolidated
operations during the quarter ended January 31, 1997 and comparable data on a
location basis.
The Company believes that its historical results may not be indicative of future
results of operations because of the substantial present and expected future
increase in gaming competition for gaming customers in each of the Company's
markets as new casinos open and as existing casinos add to or enhance their
facilities. The Company believes that seasonality does not have a significant
effect on its business.
12
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended January 31, 1997 - Consolidated Company
Total revenue for the quarter ended January 31, 1997 was $110.4 million which
included $95.8 million of casino revenue, $2.6 million of rooms revenue, $6.4 of
pari-mutuel commissions, and $5.6 million of food, beverage and other revenue.
The consolidated revenue of the Company has been impacted by the inclusion of
the Isle-Bossier City and the Isle-Lake Charles into the Company's consolidated
financial statements and by the GPRI operations for a full quarter. Revenue
does not reflect the retail value of any complimentaries. Also, as a result of
the LRGP Acquisition, management fees are not reported for periods subsequent to
the date of acquisition because these amounts have been eliminated in
consolidation.
Casino operating expenses for the quarter totaled $17.9 million, or 19% of
casino revenue versus $7.6 million, or 24% for the three months ended January
31, 1996. These expenses were primarily comprised of salaries, wages and
benefits, and operating and promotional expenses of the casino. The improvement
in operating expenses as a percentage of casino revenues is attributed to the
Company's expense reduction efforts combined with a shift to direct response
marketing.
Operating expenses for the quarter also included room expenses of $1.0 million
from the hotels at the Isle-Biloxi and the Isle-Bossier City. These expenses
were those directly relating to the cost of providing hotel rooms. Other costs
of the hotels are shared with the casinos and are presented in their respective
expense categories.
State and local gaming taxes paid in Mississippi and Louisiana totaled $18.7
million for the quarter which is consistent with the gaming tax rate for
previous periods.
Food and beverage and other expenses totaled $3.1 million for the quarter.
These expenses are comprised primarily of the cost of goods sold, salaries,
wages and benefits, and the operating expenses of these departments.
Marine and facilities expenses totaled $5.3 million for the three months ended
January 31, 1997 and included salaries, wages and benefits, operating expenses
of the marine crews, insurance, housekeeping and general maintenance of the
riverboats and floating pavilions.
Marketing and administrative expenses totaled $38.6 million for the quarter.
Marketing expenses included salaries, wages and benefits of the marketing and
sales departments as well as promotions, advertising, special events and
entertainment. Administrative expenses included administration and human
resource department expenses, rent, new development activities, professional
fees and property taxes.
Depreciation and amortization expense was $7.7 million for the quarter. These
expenses relate to capital expenditures and acquisition of leasehold
improvements, and berthing and concession rights, as well as the amortization of
intangible assets.
Interest expense was $11.5 million for the quarter net of interest income of
$1.0 million. Interest expense primarily relates to indebtedness incurred in
connection with the acquisition of property, equipment, leasehold improvements
and berthing and concession rights, as well as indebtedness relating to the
purchase of the remaining interest in LRGP.
13
<PAGE>
The Company has improved operating results over the previous quarter to produce
a net income of $.8 million for the quarter ended January 31, 1997 compared to a
loss before extraordinary item of $5.0 million for the quarter ended October 31,
1996. The improvement relates primarily to the Company's improved management of
staffing, marketing and other expenditure levels at its Louisiana and Vicksburg
properties. The Company's effective tax rate for the quarter was higher than the
statutory tax rate, due primarily to state taxes paid by subsidiaries and the
non-deductibility of the amortization of certain intangible assets for tax
purposes.
Three Months Ended January 31, 1997, Compared to Three Months Ended January 31,
1996-By Location
Isle-Biloxi
For the quarter ended January 31, 1997, the Isle-Biloxi had total revenue of
$21.3 million of which $18.3 million was casino revenue, compared to total
revenue of $20.0 million of which $17.4 million was casino revenue for the
quarter ended January 31, 1996. The increase in revenue relates primarily to
increased occupancy and casino traffic resulting from its 367-room hotel which
opened on August 1, 1995. Operating income for the three months ended January
31, 1997 totaled $3.4 million or 16% of total revenues compared to $2.8 million
or 14% for the three months ended January 31, 1996. Increased operating income
and operating income margin are due primarily to improved operating efficiency
following the start-up of hotel operations.
Isle-Vicksburg
For the quarter ended January 31, 1997, the Isle-Vicksburg had total revenue of
$12.3 million of which $11.8 million was casino revenue, compared to total
revenue of $14.5 million of which $14.1 million was casino revenue for the
quarter ended January 31, 1996. Operating Income for the three months ended
January 31, 1997 totaled $2.0 million or 16% of total revenue compared to $2.8
million or 19% for the three months ended January 31, 1996. The decrease in
revenue and operating income relates primarily to the impact of increased
competition and the overall weakness of the market.
Isle-Bossier City
For the quarter ended January 31, 1997, the Isle-Bossier City had total revenue
of $36.0 million of which $33.9 million was casino revenue, compared to total
revenue of $36.6 million of which $32.3 million was casino revenue for the
quarter ended January 31, 1996. Operating income for the three months ended
January 31, 1997 totaled $4.2 million or 12% of total revenue compared to $8.6
million or 23% for the three months ended January 31, 1996. The decrease in
operating income relates primarily to increased promotional activities by the
Isle-Bossier City and its competitors in the market and the addition of a new
competitor in the market, in October, 1996.
Isle-Lake Charles
For the quarter ended January 31, 1997, the Isle-Lake Charles had total revenue
of $32.6 million of which $31.7 million was casino revenue, compared to total
revenue of $19.4 million of which $18.2 million was casino revenue for the
quarter ended January 31, 1996. The increase in revenue relates to the
commencement of a two-boat operation on July 12, 1996. Operating income for the
three months ended January 31, 1997 totaled $4.1 million or 13% of total revenue
compared to operating income of $1.2 million or 6% of total revenue for the
three months ended January 31, 1996. The operating performance at the Isle-Lake
Charles has been positively impacted by the addition of the second riverboat
casino and the Company's efforts to reduce operating costs.
Nine Months Ended January 31, 1997 - Consolidated Company
Total revenue for the nine months ended January 31, 1997 was $265.5 million
which included $227.9 million of casino revenue, $9.0 million of rooms revenue,
$2.1 million of management fees, $12.1 million of pari mutuel commissions, and
$14.4 million of food, beverage and other revenue. The consolidated revenue of
the Company has been impacted by the inclusion of the Isle-Bossier City and
14
<PAGE>
the Isle-Lake Charles into the Company's consolidated financial statements since
August 6, 1996, and by the GPRI operations since July 12, 1996. Revenue does
not reflect the retail value of any complimentaries. Also, as a result of the
LRGP Acquisition, management fees are not reported for the periods subsequent to
the date of acquisition because these amounts have been eliminated in
consolidation.
Casino operating expenses for the nine-month period totaled $46.1 million, or
20% of casino revenue versus $20.4 million, or 23% for the nine months ended
January 31, 1996. These expenses were primarily comprised of salaries, wages
and benefits, and operating and promotional expenses of the casinos. The
improvement in operating expenses as a percentage of casino revenues is
attributed to the Company's expense reduction efforts combined with a shift to
direct response marketing.
Operating expenses for the nine-month period also included room expenses of $3.4
million from the hotels at the Isle-Biloxi and the Isle-Bossier City. These
expenses were those directly relating to the cost of providing hotel rooms.
Other costs of the hotels are shared with the casinos and are presented in their
respective expense categories.
State and local gaming taxes paid in Mississippi and Louisiana totaled $41.8
million for the nine-month period, which is consistent with the gaming tax rate
for previous periods.
Food and beverage expenses totaled $10.7 million for the nine-month period.
These expenses are comprised primarily of the cost of goods sold, salaries,
wages and benefits, and the operating expenses of these departments.
Marine and facilities expenses totaled $14.7 million for the nine-month period
ended January 31, 1997 and include salaries, wages and benefits, operating
expenses of the marine crews, insurance, housekeeping and general maintenance of
the riverboats and floating pavilions.
Marketing and administrative expenses totaled $93.7 million for the nine-month
period. Marketing expenses included salaries, wages and benefits of the
marketing and sales departments as well as promotions, advertising, special
events and entertainment. Administrative expenses included administration and
human resource department expenses, rent, new development activities,
professional fees and property taxes.
Depreciation and amortization expense was $19.1 million for the nine-month
period. This expense relates to capital expenditures and acquisition of
leasehold improvements, and berthing and concession rights, as well as the
amortization of intangible assets.
Preopening expenses of $2.5 million and $1.3 million for the nine-month periods
ending January 31, 1997 and 1996, respectively, represent salaries, wages and
benefits, training, marketing and other non-capitalized costs which were
expensed as incurred in connection with the opening of the Grand Palais
riverboat and the Isle of Capri Casino - Biloxi Hotel, respectively.
Interest expense was $27.6 million for the nine-month period net of interest
income of $1.6 million. Interest expense relates to indebtedness incurred in
connection with the acquisition of property, equipment, leasehold improvements
and berthing and concession rights, as well as indebtedness relating to the
purchase of the remaining interest in LRGP and the purchase of GPRI.
The Company had a loss before extraordinary item of $1.3 million for the nine
months ended January 31, 1997, primarily as a result of the adverse performance
of its Louisiana casinos and increased competition within its markets during the
nine months ended January 31, 1997. In addition, the Company recorded an
extraordinary charge of $12.3 million (net of a tax benefit of $6.6 million)
resulting from the refinancing of its First Mortgage Notes and other
indebtedness in August 1996. The Company's effective tax rate for the nine-month
period was higher than the statutory tax rate, due primarily to state taxes paid
by subsidiaries and the non-deductibility of the amortization of certain
intangible assets for tax purposes.
15
<PAGE>
Nine Months Ended January 31, 1997, Compared to Nine Months Ended January 31,
1996 - By Location
Isle-Biloxi
For the nine months ended January 31, 1997, the Isle-Biloxi had total revenue of
$67.3 million of which $56.4 million was casino revenue, compared to total
revenue of $52.3 million of which $46.5 million was casino revenue for the nine
months ended January 31, 1996. The increase in revenue relates to increased
occupancy and a full period of operations of its 367-room hotel which opened on
August 1, 1995. Operating income for the nine months ended January 31, 1997
totaled $11.4 million or 17% of total revenue compared to $7.0 million or 13%,
before preopening expenses of $1.3 million, for the nine months ended January
31, 1996. The increases in operating income and operating income margin were
due primarily to improved operating efficiencies following the start-up of hotel
operations.
Isle-Vicksburg
For the nine months ended January 31, 1997, the Isle-Vicksburg had total revenue
of $40.6 million of which $38.6 million was casino revenue, compared to total
revenue of $45.2 million of which $43.8 million was casino revenue for the nine
months ended January 31, 1996. Operating income for the nine months ended
January 31, 1997 totaled $5.8 million or 14% of total revenue compared to $9.6
million or 21% for the nine months ended January 31, 1996. The decrease in
revenue and operating income is primarily a result of increased competition from
the overall weakness of the market.
Isle-Bossier City
For the nine months ended January 31, 1997, the Isle-Bossier City had total
revenue of $113.2 million of which $105.2 million was casino revenue, compared
to total revenue of $114.5 million of which $105.8 million was casino revenue
for the nine months ended January 31, 1996. Operating income for the nine
months ended January 31, 1997 totaled $16.4 million or 15% of total revenue
compared to $29.9 million or 26% for the nine months ended January 31, 1996.
The decrease in revenue and operating margin primarily reflects the impact of
increased promotional activities by the Isle-Bossier City and its competitors in
the market and the addition of a new competitor in the market in October, 1996.
Isle-Lake Charles
For the nine months ended January 31, 1997, the Isle-Lake Charles had total
revenue of $94.4 million of which $91.4 million was casino revenue, compared to
total revenue of $37.6 million of which $35.2 million was casino revenue for the
nine months ended January 31, 1996. The increase in revenue primarily relates
to the commencement of operations of GPRI on July 12, 1996. Operating income for
the nine months ended January 31, 1997 totaled $7.8 million, or 8% of total
revenue, before preopening expenses associated with a second riverboat of $2.5
million compared to an operating loss of $6.3 million or (17)% of total revenue,
before preopening expenses of $1.9 million, for the nine months ended January
31, 1996. The operating performance at the Isle-Lake Charles has been
positively impacted by the addition of the second riverboat casino and the
Company's efforts to reduce operating expenses.
Liquidity and Capital Resources
At January 31, 1997, the Company had cash and cash equivalents of $38.8 million
compared to $18.6 million at April 30, 1996. The increase in cash is a result
of the proceeds received from the Rights Offering and issuance of the Senior
Secured Notes. During the nine-month period ended January 31, 1997, the
Company's operating activities used $.8 million of cash compared to $2.9 million
of cash flow provided by operating activities in the first nine months of fiscal
1996.
16
<PAGE>
The Company invested $13.4 million in property and equipment in the first nine
months of fiscal 1997, primarily for equipment, as well as in connection with
the completion of the events center at the Isle-Lake Charles and the
construction of a limited stakes poker room at Pompano Park, which opened on
January 1, 1997.
In July and August, 1996, the Company received an aggregate of $18.1 million
from the issuance of 3,079,980 shares of common stock issued pursuant to the
Rights Offering.
On August 6, 1996, the Company issued $315,000,000 of 12-1/2% Senior Secured
Notes due 2003. Interest on the Senior Secured Notes is payable semiannually on
each February 1 and August 1, commencing February 1, 1997, through maturity.
Part of the proceeds from the Senior Secured Notes were used to retire or
defease $180,285,000 in long-term debt, including $105,000,000 of 11-1/2%
First Mortgage Notes due 2001. The proceeds were also used to pay accrued
interest and other costs of $16,396,000 and to acquire the remaining 50%
interest in LRGP and LRG Hotels, L.L.C. held by Louisiana River Site
Development, Inc. The consideration for the LRGP Acquisition included
$85,000,000 in cash, five-year warrants to purchase 500,000 shares of common
stock at an exercise price of $10.50 per share, and $1.5 million per year
for seven years, payable monthly beginning on October 1, 1998.
The Company anticipates that its principal near-term capital requirements will
relate to the completion of its land-based facilities and a 241-room hotel at
the Isle-Lake Charles, the Isle-Bossier City and the Isle-Vicksburg and
investments in additional hotel projects adjacent to the Isle-Bossier City and
the Isle-Lake Charles.
An important component of the Company's operating strategy will be to develop,
open and operate, either directly, through a hotel joint venture or otherwise,
hotel facilities at its gaming facilities in order to attract additional gaming
patrons and encourage longer visits to and a greater level of play at the
Company's casinos. The Company began construction of a $9.5 million, 241-room
hotel facility at the Isle-Lake Charles in March of 1997. The Company is
currently seeking financing and/or a joint venture partner for a hotel at the
Isle-Bossier City, and another hotel at the Isle-Lake Charles. Construction of
these two hotel facilities will not begin until such financing and/or joint
venture partner or partners are obtained.
Although the Company is not presently committed to making any significant
capital expenditures or investment in a new gaming market, the Company believes
that, in addition to developing hotels, it will be necessary to make certain
capital improvements to its land-based facilities at the Isle-Bossier City and
the Isle-Vicksburg and that enhancements to its non-gaming amenities at all
facilities will be important to its operations. The Company may, in the future,
also consider expanding its casino square footage at the Isle-Biloxi. In
addition, the Company may consider making investments in jurisdictions where
gaming is presently permitted and in jurisdictions where gaming is not presently
permitted, but in which it believes that gaming may be legalized in the future.
The Louisiana Gaming Control Board has requested information from the Company
regarding certain jackpots (the "Jackpots") paid at the Isle-Bossier City and at
the Isle-Lake Charles which were deducted for purposes of computing taxable
gaming revenue. At issue is the validity and applicability of a Louisiana State
Police regulation which purports to make certain jackpots non-deductible for
purposes of computing taxable gaming revenue. If the regulation is ultimately
determined to be valid and applicable to the Jackpots paid by the Isle-Bossier
City and the Isle-Lake Charles, additional gaming taxes aggregating
approximately $7.0 million plus penalties and interest could be assessed against
the Company. To date, no assessment has been made, and, based upon the advice
of counsel, the Company believes that no such taxes are owed. Should an
assessment be forthcoming, the Company intends to contest any such assessment
through appropriate administrative and legal proceedings.
The Company expects that available cash and cash from future operations will be
adequate to fund planned capital expenditures, debt service and working capital
requirements. However, no assurance can be made that the Company will have
sufficient capital resources to make all of the planned capital expenditures
described above or such capital investments that may be necessary to remain
competitive in the Company's markets. In addition, the Indenture governing the
Senior Secured Notes places certain limits on the Company's ability to incur
additional indebtedness and to make certain investments. The Company is highly
leveraged and, as a result may be unable to obtain additional debt or equity
financing on terms acceptable to the Company. As a result, limitations on the
Company's capital resources could delay certain plans with respect to capital
improvements at the Company's existing properties. Furthermore, the Company
will continue to evaluate its planned capital expenditures at each location in
light of the operating performance of the respective facilities at such
locations.
17
<PAGE>
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the asset carrying amount. Statement No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement 121 in fiscal 1997, and there was no material effect
of adoption.
18
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - The Company and its Chairman, Bernard Goldstein,
were named as defendants in a lawsuit entitled "Martin B. Greenberg
v. Casino America, Inc. and Bernard Goldstein, individually," which
was filled on January 23, 1997 in the United States District Court
for the Southern District of Florida, Fort Lauderdale Division. The
lawsuit alleges that the company purportedly breached a contract of
employment between Mr. Greenberg and the Company concerning Mr.
Greenberg's employment as Chairman of the Board of the Company's
Pompano Park subsidiary. The suit makes a claim for damages against
the Company, and against its Chairman for related matters, in an
unspecified amount.
Item 2. Changes in Securities
A. On July 26, 1996, the Company and Fleet National Bank, as Trustee,
entered into the Fourth Supplemental Indenture governing the
Company's 11-1/2 % First Mortgage Notes due 2001 (the "Amendment").
The modification effected by the Amendment set forth the Company's
ability to defease the security covenants and provisions o f such
First Mortgage Notes.
B. On August 6, 1996, the Company issued its 12-1/2% Senior Secured
Notes due 2003, in aggregate principal amount of $315 million, and
in connection therewith defeased the covenants pertaining to the
Company's 11-1/2% First Mortgage Notes due 2001, including the
Company's covenants as to the provision of security. As a result,
the security formerly securing such First Mortgage Notes now
secures, in substantial part, the newly issued Senior Secured Notes.
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-Q 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 third quarter ended January 31, 1997, the Company filed
the following reports on Form 8-K for the following dates:
None
19
<PAGE>
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.
CASINO AMERICA, INC.
Dated: March 14, 1997 By:/s/ Rexford A. Yeisley
----------------------
Rexford A. Yeisley
Chief Financial Officer &
Treasurer
(Duly Authorized Officer and
Principal Financial Officer and
Accounting Officer)
20
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
27 Financial Data Schedule
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CASINO
AMERICA, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND RELATED NOTES TO SAID
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-27-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 38,822
<SECURITIES> 0
<RECEIVABLES> 5,129
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 62,344
<PP&E> 344,826
<DEPRECIATION> 52,614
<TOTAL-ASSETS> 506,429
<CURRENT-LIABILITIES> 47,265
<BONDS> 366,678<F1>
0
0
<COMMON> 233
<OTHER-SE> 85,254
<TOTAL-LIABILITY-AND-EQUITY> 506,429
<SALES> 0
<TOTAL-REVENUES> 265,544
<CGS> 0
<TOTAL-COSTS> 112,336
<OTHER-EXPENSES> 129,984
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,219
<INCOME-PRETAX> 113
<INCOME-TAX> 1,384
<INCOME-CONTINUING> (1,271)
<DISCONTINUED> 0
<EXTRAORDINARY> (12,253)
<CHANGES> 0
<NET-INCOME> (13,524)
<EPS-PRIMARY> (.61)
<EPS-DILUTED> (.61)
<FN>
<F1>Includes Bonds payable of $315 million plus other long-term debt.
</FN>
</TABLE>
