UNITED STATES
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): March 02, 2000
ISLE OF CAPRI CASINOS, INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20538 41-1659606
-------- ------- ----------
(State or other (Commission (I.R.S. Employer
Jurisdiction of File Identification
Incorporation) Number) No.)
1641 Popps Ferry Road, Biloxi, Mississippi 39532
- ------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (228) 396-7000
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As of March 2, 2000, Isle of Capri Casinos, Inc., a Delaware corporation
("Isle"), and Isle Merger Corp., a Delaware corporation and a wholly-owned
subsidiary of Isle ("Merger Corp.") pursuant to an Agreement and Plan of Merger
dated as of October 5, 1999 (the "Lady Luck Merger Agreement") consummated a
merger with Lady Luck Gaming Corporation, a Delaware corporation ("Lady Luck").
Pursuant to the terms of the Lady Luck Merger Agreement, Merger Corp. merged
with and into Lady Luck (the "Lady Luck Merger"). At the effective time of the
Lady Luck Merger, the separate existence of Merger Corp. ceased, Lady Luck
became a wholly-owned subsidiary of Isle and each common stockholder of Lady
Luck received cash in the amount of $12.00 per share for an aggregate share
consideration of approximately $59 million.
Prior to the effective time of the Lady Luck Merger, Lady Luck redeemed all
of its $173.5 million 11 7/8% First Mortgage Notes due 2001 and all of its
Series A Cumulative Redeemable Preferred Stock for which the redemption
consideration aggregated approximately $23.5 million.
Isle also consummated its acquisition of the 50% interest in the Lady Luck
Bettendorf casino and hotel in Bettendorf, Iowa and related real estate owned by
members of the family of Bernard Goldstein, Chairman and Chief Executive Officer
of Isle. Pursuant to the terms of an Agreement and Plan of Merger dated as of
December 19, 1999 (the "BRDC Merger Agreement") with BRDC, Inc., an Iowa
corporation ("BRDC") and the shareholders of BRDC, BRDC merged with and into
Isle (the "BRDC Merger"). At the effective time of the BRDC Merger, the
separate existence of BRDC ceased and the shareholders of BRDC received an
aggregate of 6,300,000 shares of Isle common stock and a cash payment to be
calculated which is estimated to be approximately $300,000 related to certain
adjustments specified in the BRDC Merger Agreement.
Lady Luck consummated its acquisition of the Lady Luck trademark and
related intellectual property and all the shares of International Marco Polo's
Services, Inc. pursuant to the First Amendment dated as of October 5, 1999 to
the Amended and Restated Purchase Agreement dated as of August 31, 1999
effective as of August 19, 1999 (the "Purchase Agreement"), by and among Lady
Luck Gaming Corporation, Gemini, Inc., International Marco Polo's Services, Inc.
and Andrew H. Tompkins, former Chairman and Chief Executive Officer of Lady
Luck.
In addition, the press release of Isle, dated March 2, 2000 is filed as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
7 (a) Financial statements of businesses acquired.
(a) (1) The financial statements of Lady Luck Gaming Corporation required
pursuant to Rule 3-05 of Regulation S-X were previously reported in Lady Luck's
Annual Report on Form 10-K for the year ended December 31, 1998 and Lady Luck's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999, June 30,
1999 and September 30, 1999 and are incorporated herein by this reference.
(a)(2) The financial statements of BRDC, Inc. required pursuant to Rule 3-05 of
Regulation S-X are included herein and are incorporated by reference to Isle of
Capri's definitive proxy statement filed January 12, 2000 with respect to the
period as of September 30, 1999 (unaudited), December 31, 1998, and for the
three and nine month period ended September 30, 1999 and 1998 (unaudited).
<PAGE>
<TABLE>
<CAPTION>
BRDC, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<S> <C>
Page
----
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets, December 31, 1998 and 1997. . . . . . . . 4
Consolidated Statements of Operations for the years ended December 31,
1998, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Stockholders' Equity (Deficit) for the
years ended December 31, 1998, 1997 and 1996 . . . . . . . . . . . 6
Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 8
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
BRDC, Inc.
Bettendorf, Iowa
We have audited the accompanying consolidated balance sheets of BRDC, Inc.
and subsidiary as of December 31, 1998 and 1997, and the consolidated statements
of income, stockholders' equity (deficit) and cash flows for the years ended
December 31, 1998, 1997 and 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BRDC, Inc. and subsidiary as
of December 31, 1998 and 1997, and the results of their operations and their
cash flows for the years ended December 31, 1998, 1997 and 1996 in conformity
with generally accepted accounting principles.
Moline, Illinois MCGLADREY & PULLEN, LLP
February 23, 2000
<PAGE>
<TABLE>
<CAPTION>
BRDC, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1997
(Dollars in Thousands)
<S> <C> <C>
ASSETS 1998 1997
------ ---- ----
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . $ 157 $ 114
Accounts receivable:
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 50
Related parties . . . . . . . . . . . . . . . . . . . . . . 173 348
------- -------
Total current assets. . . . . . . . . . . . . . . . . 380 512
Property and improvements - net . . . . . . . . . . . . . . . . . 1,420 2,136
Investment in Lady Luck Bettendorf, L.C.. . . . . . . . . . . . . 14,411 9,312
------- -------
Total assets. . . . . . . . . . . . . . . . . . . . . $16,211 $11,960
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable, related party . . . . . . . . . . . . . . . $ 22 $ 377
Current maturities of long-term debt
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 620 500
Related parties . . . . . . . . . . . . . . . . . . . . . 259 333
Accrued liabilities:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . 19 19
Interest, related parties . . . . . . . . . . . . . . . . 40 24
------- -------
Total current liabilities . . . . . . . . . . . . . . 960 1,253
------- -------
Long-term debt, less current maturities:
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,634 2,018
Related parties . . . . . . . . . . . . . . . . . . . . . . . 9,244 8,222
------- -------
Total long-term debt. . . . . . . . . . . . . . . . . . . 10,878 10,240
------- -------
Stockholders' equity:
Common stock, no par value, 10,000 shares authorized; 400 shares
issued and outstanding: . . . . . . . . . . . . . . . . . - -
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 4,373 467
------- -------
Total stockholders' equity. . . . . . . . . . . . . . 4,373 467
------- -------
Total liabilities and stockholders' equity. . . . . . $16,211 $11,960
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BRDC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(In thousands, except share and per share data)
<S> <C> <C> <C>
1998 1997 1996
---- ---- ----
Revenue:
Rent, related party. . . . . . . . . . . . . . . . . $ 1,860 $ 1,800 $ 1,800
Management fee . . . . . . . . . . . . . . . . . . . 325 325 325
Other. . . . . . . . . . . . . . . . . . . . . . . . 104 13 11
----------- ----------- -----------
Total Revenue. . . . . . . . . . . . . . . . . 2,289 2,138 2,136
Operating Expenses:
General and administrative . . . . . . . . . . . . 50 121 91
Depreciation . . . . . . . . . . . . . . . . . . . 121 123 123
----------- ----------- -----------
Total operating expenses . . . . . . . . . . . 171 244 214
----------- ----------- -----------
Operating income . . . . . . . . . . . . . . . . . 2,118 1,894 1,922
Interest expense, other. . . . . . . . . . . . . . . . (225) (306) (155)
Interest expense, related parties. . . . . . . . . . . (719) (581) (495)
Equity in income of unconsolidated joint venture. . . 5,099 3,427 3,091
----------- ----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . $ 6,273 $ 4,434 $ 4,363
=========== =========== ===========
Net income per common share - basic. . . . . . . . $15,683 $11,085 $10,908
Net income per common share - assuming dilution. . $15,683 $11,085 $10,908
Weighted average basic shares. . . . . . . . . . . 400 400 400
Weighted average diluted shares. . . . . . . . . . 400 400 400
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BRDC, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(In thousands, except number of shares)
<S> <C> <C> <C> <C>
Shares of Total
Common Common Retained Stockholders'
Stock Stock Earnings Equity
--------- ------- ---------- ---------------
Balance, December 31, 1995 . . . . . . . . . . . . . . . 400 $ - $ (670) $ (670)
Net Income . . . . . . . . . . . . . . . . . . . . . - - 4,363 4,363
Distributions. . . . . . . . . . . . . . . . . . . . - - (5,250) (5,250)
--------- ------- ---------- ---------------
Balance, December 31, 1996 . . . . . . . . . . . . . . . 400 - (1,557) (1,557)
Net Income . . . . . . . . . . . . . . . . . . . . . - - 4,434 4,434
Distributions. . . . . . . . . . . . . . . . . . . . - - (2,410) (2,410)
--------- ------- ---------- ---------------
Balance, December 31, 1997 . . . . . . . . . . . . . . . 400 - 467 467
Net Income . . . . . . . . . . . . . . . . . . . . . - - 6,273 6,273
Distributions. . . . . . . . . . . . . . . . . . . . - - (2,367) (2,367)
--------- ------- ---------- ---------------
Balance, December 31, 1998 . . . . . . . . . . . . . . . 400 $ - $ 4,373 $ 4,373
========= ======= ========== ===============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BRDC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
<S> <C> <C> <C>
1998 1997 1996
-------- -------- --------
Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,273 $ 4,434 $ 4,363
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 121 123 123
Equity in income of unconsolidated joint venture . . . . . . . (5,099) (3,427) (3,091)
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable . . . . . . . . - (50) 225
(Increase) decrease in accounts receivable, related party. 175 (9) (109)
Increase (decrease) in accounts payable, related party . . (355) 157 103
Increase in accrued interest, related parties. . . . . . . 16 4 -
Increase in accrued interest . . . . . . . . . . . . . . . - 19 -
-------- -------- --------
Net cash provided by operating activities. . . . . . . . . . . . . . 1,131 1,251 1,614
-------- -------- --------
Financing Activities:
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . - - 3,948
Proceeds from long-term debt, related parties. . . . . . . . . . . . 3,500 2,500 -
Principal payments on long-term debt . . . . . . . . . . . . . . . . (264) (1,132) (298)
Principal payments on long-term debt, related parties. . . . . . . . (2,552) (103) (54)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . (1,772) (2,410) (5,250)
-------- -------- --------
Net cash (used in) financing activities. . . . . . . . . . . . . . . (1,088) (1,145) (1,654)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents . . . . . . . . 43 106 (40)
Cash and cash equivalents at beginning of period . . . . . . . . . . 114 8 48
-------- -------- --------
Cash and cash equivalents at end of period . . . . . . . . . . . . . $ 157 $ 114 $ 8
======== ======== ========
Supplemental Disclosure of Noncash Investing and Financing Activities:
Distribution of assets to stockholders . . . . . . . . . . . . $ 595 $ - $ -
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . $ 928 $ 864 $ 650
</TABLE>
See notes to consolidated financial statements.
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
1. Nature of Business and Significant Accounting Policies
Nature of business
BRDC, Inc. and subsidiary, collectively, (the "Company") was formed to
acquire real estate.
The Company owns approximately 24.6 acres of land in Bettendorf, Iowa and
100% of Bettendorf Riverfront Development Company, L.C. ("BRDC"). The Company
leases land to its unconsolidated joint venture, Lady Luck Bettendorf, L.C. (The
Bettendorf Joint Venture). In addition, the Company receives a management fee
for services concerning licensing, staffing and management of the marine aspects
of a gaming vessel.
Bettendorf Riverfront Development Company, L.C. and Lady Luck Quad Cities,
Inc. ("LLQC") formed an Iowa limited liability company, Lady Luck Bettendorf,
L.C. for the purpose of operating a riverboat casino on the Mississippi River
based in Bettendorf, Iowa. Under the terms of the Articles of Organization, The
Bettendorf Joint Venture's term will expire in 2065. BRDC and LLQC each
contributed $3,000 for a 50% ownership interest in The Bettendorf Joint Venture.
All net profits and losses from all operations of The Bettendorf Joint Venture
are allocated equally between LLQC and BRDC. BRDC and LLQC are each represented
by two managers with most management decisions of The Bettendorf Joint
Venture requiring the approval of both members. (See Note 3 regarding a
reorganization in 1998.)
The Bettendorf Joint Venture commenced operations on April 21, 1995. The
Bettendorf Joint Venture is located on a leased parcel of land which is adjacent
to Interstate 74 on the Mississippi River. The Bettendorf Joint Venture's
operations consist of a 30,000 square foot casino with approximately 50 table
and card games and 1,157 slot machines within three floors of a gaming vessel,
which is approximately 300 feet by 100 feet, a 256-room hotel, buffet style
restaurant, gift shop, commercial center, sports bar, 500-space parking garage
and a land based entertainment area for parties, shows and special events. The
first floor has a Las Vegas casino theme, the second floor has a sports theme
and the poker room is on the third floor. The vessel is certified for 2,500
passengers including crew. The Bettendorf Joint Venture's market is
concentrated in a radius of 50 miles of the Quad City Area and the Chicago area
serviced by ongoing bus programs.
The Company records its investment in the above joint venture under the
equity method of accounting.
Significant accounting policies
Estimates. The preparation of financial statements in conformity with generally
accepted accounting principles 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 and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Principles of consolidation. The consolidated financial statements include the
accounts of BRDC, Inc. and its wholly-owned subsidiary, Bettendorf Riverfront
Development Company, L.C. All material intercompany accounts and transactions
have been eliminated in consolidation.
Cash and cash equivalents. The Company considers all highly liquid investments
purchased with an original maturity of three months or less as cash equivalents.
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in Thousands)
1. Nature of Business and Significant Accounting Policies (continued)
Property and improvements. Property and improvements are stated at cost.
Depreciation is computed using the straight-line method. Estimated useful lives
for financial reporting purposes are as follows:
Buildings 31 years
Land improvements 15-20 years
Costs of major improvements are capitalized, while costs of normal repairs
and maintenance are charged to expense as incurred.
Income taxes. The Company, with the consent of its stockholders, elected to
be taxed under sections of federal and state income tax laws, which provide
that, in lieu of corporation income taxes, the stockholders separately account
for their pro rata shares of the Company's items of income, deductions, losses
and credits.
The Company expects to pay dividends to assist the stockholders in paying
their federal and state income tax liabilities resulting from the taxation of
their proportionate share of the Company's income and deductions.
Net income per share. Net income per share is computed on the basis of the
weighted average number of common shares outstanding each year. The Company
does not have any dilutive securities.
Financial instruments. The Company has reviewed the following financial
instruments and has determined that their fair values approximated their
carrying values as of December 31, 1998 and 1997: cash and cash equivalents,
accounts receivable, accounts payable and accrued expenses. Notes payable are
at approximately current rates except for a term loan which was paid off after
year-end and which approximates fair value.
2. Certain Risks and Uncertainties
The Joint Venture's operations in Iowa are dependent upon its continued
ability to be licensed by the respective gaming authorities. Such licenses are
reviewed periodically by the gaming authorities in these states.
3. Reorganization
In 1998, the members of Bettendorf Riverfront Development Company, L.C.
contributed their membership interests to BRDC, Inc. in exchange for the stock
of BRDC, Inc. BRDC, Inc. had no assets or liabilities prior to the exchange.
Since the Company and Bettendorf Riverfront Development Company, L.C. were
under common control, the transaction has been accounted for in a manner similar
to a pooling-of-interest and, as such, the transaction had no effect on the
consolidated financial statements for any period presented.
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in Thousands)
4. Property and Improvements
The property and improvements as of December 31, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
------ ------
Land. . . . . . . . . . . . . . . . . . $ 163 $ 238
Land improvements.. . . . . . . . . . . 1,297 1,950
Outlet mall.. . . . . . . . . . . . . . 257 257
------ ------
Total property and improvements. . 1,717 2,445
Less accumulated depreciation.. . . . . 297 309
------ ------
Total property and improvements,
net of accumulated depreciation. $1,420 $2,136
====== ======
</TABLE>
5. Long-Term Debt
Long-term debt as of December 31, 1998 and 1997 consists of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
------- -------
Term loan, related party, unsecured, due in monthly installments of $37, including interest
at 7 1/2%, with a final payment due October 9, 2003 . . . . . . . . . . . . . . . . . . . . .$ 3,469 $ -
Term loan, due in monthly installments of $65, including interest at variable rates of .50%
under the National Bank Prime (effective rates of 7.75% as of December 31, 1998 and
8% as of December 31, 1997) with final payment due April 2, 2002. This loan is secured
by a real estate mortgage on land, guaranteed by the stockholders and related parties,
assignment of a lease between The Bettendorf Joint Venture and the Company and a
pledge of the membership interest in the joint venture. Subsequent to year-end, this note
was paid off. (See Note 8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,254 2,518
Term loan, related party, due in monthly installments of $53, including interest at 9.5%
with a final payment due April 13, 2025. This note is secured by land which was acquired
by the Company. Subsequent to year-end, this note was paid off. (See Note 8) . . . . . . . . 6,034 6,098
Term loan, related party, unsecured, due in monthly installments of $41, including interest
at 9 1/2%, with a final payment due October 31, 2004. This loan was paid off on
October 8, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2,457
------- -------
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,757 11,073
Less: current maturities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 879 833
------- -------
Total long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,878 $10,240
======= =======
</TABLE>
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in Thousands)
5. Long-Term Debt (continued)
Future annual maturities of the long-term debt are as follows:
<TABLE>
<CAPTION>
Year Ending December 31:
- ------------------------
<S> <C>
1999 . . . . . . . . . .$ 879
2000 . . . . . . . . . . 951
2001 . . . . . . . . . . 1,263
2002 . . . . . . . . . . 326
2003 . . . . . . . . . . 2,715
Thereafter . . . . . . . 5,623
--------
$ 11,757
========
</TABLE>
6. Lease Agreement
The Company has entered into a long-term operating lease agreement with The
Bettendorf Joint Venture. The lease is for an initial term of 10 years,
expiring on May 2005, with nine 10-year options. The Company receives annual
rent payments of $1,800 from The Bettendorf Joint Venture. The Bettendorf Joint
Venture has an option to purchase the land during the initial term of the lease
for its appraised fair market value. The Bettendorf Joint Venture has not
exercised this option as of December 31, 1998. The lease requires the lessee to
pay for all related property taxes.
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in Thousands)
7. Investment in Joint Venture of Lady Luck Bettendorf, L.C.
The Company, through its subsidiary, owns 50% of Lady Luck Bettendorf, L.C.
(The Bettendorf Joint Venture).
The Company is accounting for its investment in The Bettendorf Joint
Venture by the equity method of accounting under which the net income or loss of
the joint venture is recognized as income or loss in the Company's income
statement and added to or subtracted from the investment account.
A summary balance sheet of the joint venture as of December 31, 1998 and
1997 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
------- -------
ASSETS
------
Current assets. . . . . . . . . $ 6,870 $ 4,636
Property and equipment, net . . 52,727 25,459
Other assets. . . . . . . . . . 750 854
------- -------
$60,347 $30,949
======= =======
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
Current liabilities . . . . . . $ 8,154 $ 8,947
Long-term debt. . . . . . . . . 23,370 3,377
Members' equity . . . . . . . . 28,823 18,625
------- -------
$60,347 $30,949
======= =======
</TABLE>
Summarized results of operations for the years ended December 31, 1998, 1997 and
1996 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
------- ------- -------
Net revenues . . . $84,508 $71,612 $65,202
Costs and expenses 74,310 64,758 59,020
------- ------- -------
Net income . . $10,198 $ 6,854 $ 6,182
======= ======= =======
</TABLE>
A summary of changes in the Company's investment in the Bettendorf Joint
Venture for the years ended December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
------- ------
Investment, beginning of period. . . . . . . . . $ 9,312 $5,885
Equity in net income of unconsolidated affiliate 5,099 3,427
------- ------
Investment, end of period. . . . . . . . . . . . $14,411 $9,312
======= ======
</TABLE>
Included in the Company's retained earnings is $11,411 and $6,312 of
undistributed retained earnings of the Joint Venture as of December 31, 1998 and
1997.
<PAGE>
BRDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in Thousands)
8. Subsequent Events
Subsequent to year-end, the Company entered into an agreement with a bank
to borrow $8,500. The proceeds were used to retire the notes payable to a
related party and a term loan. The new loan bears interest at 7.3% with monthly
payments of $170 with a final payment due February 1, 2004. The loan is
collateralized by substantially all the assets of the Company. The loan can be
prepaid if the borrower gives at lease thirty days prior written notice to
prepay and pays a prepayment premium based on a range depending on timing of
prepayment.
The shareholders of the Company have entered into a letter of intent for a
tax-free merger with the Isle of Capri Casinos, Inc. The agreement is subject
to approval by the shareholders of the Isle of Capri Casinos, Inc. Effective
with the merger, the separate corporate existence of the Company shall cease.
<PAGE>
7 (b) Pro forma financial information.
UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated financial
statements are based on the historical financial statements of the Company
adjusted to give effect to the Lady Luck Gaming Corporation ("LUCK")
Acquisition, LUCK's purchase of Gamblers Supply Management Company ("Miss
Marquette" or "MM"), and the BRDC, Inc. ("BRDC") Acquisition. The unaudited pro
forma condensed consolidated balance sheet as of October 24, 1999 gives effect
to the LUCK Acquisition, LUCK's purchase of Miss Marquette, and the BRDC
Acquisition as if such transactions had occurred on October 24, 1999. The
unaudited pro forma condensed consolidated statement of operations for the year
ended April 25, 1999, and the unaudited pro forma condensed consolidated
statement of operations for the six months ended October 24, 1999, gives effect
to the LUCK Acquisition, LUCK's purchase of Miss Marquette, and the BRDC
Acquisition as if such transactions had occurred on April 27, 1998.
The LUCK Acquisition, LUCK's purchase of Miss Marquette and the BRDC
Acquisition have been or will be accounted for by the Company using the purchase
method of accounting. The pro forma adjustments are based upon currently
available information and certain assumptions that management believes are
reasonable. In the opinion of the Company's management, all adjustments
necessary to present fairly the pro forma statements have been made. The actual
purchase price adjustments will be determined based on the fair market value of
the assets and liabilities acquired and may differ significantly from the
amounts reflected in the pro forma adjustments.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of the financial position or results of operation which
would have been achieved had the above mentioned transactions occurred on the
indicated dates, nor are they necessarily indicative of the results of future
operations. The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the financial statements and related notes of
the Company and LUCK which are incorporated herein by reference as well as BRDC
which is included elsewhere in this filing.
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
October 24, 1999
(In thousands)
<TABLE>
<CAPTION>
10/24/99 9/30/99 9/30/99
<S> <C> <C> <C> <C> <C>
ISLE.. . . LUCK GSMC (MM)
ASSETS.. . . . . . . . . . . . . . Historical Historical Historical Adjustments
------ ---------- ---------- ---------- -----------
Current Assets:
Cash and cash equivalents . . . . . . . . . . . $ 88,841 $ 22,201 $ 2,306 $ 108,068 1
Marketable securities . . . . . . . . . . . . . - 18,092 - -
Accounts receivable . . . . . . . . . . . . . . 4,641 736 1 -
Income tax receivable . . . . . . . . . . . . . 800 - - -
Deferred income taxes . . . . . . . . . . . . . 4,684 - - -
Prepaid expenses and other assets . . . . . . . 7,291 2,243 370 -
----------- ------------ ------------ -------------
Total current assets. . . . . . . . . . . . 106,257 43,272 2,677 108,068
Property and equipment - net. . . . . . . . . . . 437,924 131,874 28,323 (10,923) 2
Other assets:
Investments in & advances to
joint ventures. . . . . . . . . . . . . . . . 2,606 17,204 - -
Property held for development or sale . . . . . 3,782 - - -
Licenses and other intangible assets,
net of accumulated amortization . . . . . . . 61,956 - - -
Goodwill, net of accumulated amortization . . . 51,631 - - 89,991 3
Berthing, concession, and leasehold rights,
net of accumulated amortization . . . . . . . 3,963 - - -
Deferred financing costs, net of
accumulated amortization. . . . . . . . . . . 18,330 1,226 - 11,774 4
Notes receivable. . . . . . . . . . . . . . . . - - 100 -
Deferred income taxes . . . . . . . . . . . . . - - 282 19,761 5
Restricted cash . . . . . . . . . . . . . . . . 3,840 - - -
Prepaid deposits and other. . . . . . . . . . . 3,890 4,601 - -
----------- ------------ ------------ -------------
Total assets. . . . . . . . . . . . . . . . $ 694,179 $ 198,177 $ 31,382 $ 218,671
=========== ============ ============ =============
<PAGE>
LIABILITIES AND STOCKHOLDERS'
EQUITY/MEMBERS' EQUITY
-----------------------------
Current liabilities:
Current maturities of long-term debt. . . . . . $ 7,988 $ 1,052 $ 2,207 $ 5,491 6
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . 15,394 2,697 344 -
Related party . . . . . . . . . . . . . . . . - - - -
Accrued liabilities:
Interest. . . . . . . . . . . . . . . . . . . 3,039 1,859 - -
Payroll and related . . . . . . . . . . . . . 26,482 - 1,145 2,748 7
Property and other taxes. . . . . . . . . . . 15,578 985 - -
Progressive jackpots and slot club awards . . 6,324 - - -
Amounts due to parent company . . . . . . . . - - 11,762 (11,762) 8
Other . . . . . . . . . . . . . . . . . . . . 8,682 10,466 819 500 9
----------- ------------ ------------ -------------
Total current liabilities . . . . . . . . . 83,487 17,059 16,277 (3,023)
Long-term debt, less current maturities . . . . . 520,023 176,614 2,669 238,634 10
Deferred income taxes . . . . . . . . . . . . . . 9,673 - - -
Minority interest . . . . . . . . . . . . . . . . 5,333 - - -
Preferred stock . . . . . . . . . . . . . . . . . - 22,442 - (22,442) 11
Equity:
Common stock. . . . . . . . . . . . . . . . . . 237 29 10 (39) 12
Additional paid-in capital. . . . . . . . . . . 63,693 31,382 14,677 (46,059) 12
Retained earnings (deficit)/members' equity . . 11,733 (49,349) (2,251) 51,600 12
----------- ------------ ------------ -------------
Total stockholders' equity/
members' equity . . . . . . . . . . . . . 75,663 (17,938) 12,436 5,502
----------- ------------ ------------ -------------
Total liabilities and stockholders' equity/
members' equity . . . . . . . . . . . . . $ 694,179 $ 198,177 $ 31,382 $ 218,671
=========== ============ ============ =============
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
October 24, 1999
(In thousands)
<TABLE>
<CAPTION>
ISLE/LUCK-MM
Pro Forma 9/30/99 9/30/99 Pro Forma
<S> <C> <C> <C> <C> <C> <C>
Condensed . . BRDC LLB Condensed
ASSETS. . . . . . . . . . . Consolidated Historical Historical Adjustments Consolidated
------ ------------ ---------- ---------- ----------- ------------
Current Assets:
Cash and cash equivalents . . . . . . . . . . . $ 221,416 $ 21 $ 8,410 $ (34,222) 13 $195,625
Marketable securities . . . . . . . . . . . . . 18,092 - - - 18,092
Accounts receivable . . . . . . . . . . . . . . 5,378 - 124 - 5,502
Income tax receivable . . . . . . . . . . . . . 800 - - - 800
Deferred income taxes . . . . . . . . . . . . . 4,684 - - - 4,684
Prepaid expenses and other assets . . . . . . . 9,904 - 1,508 - 11,412
------------- ----------- ----------- ------------- -------------
Total current assets. . . . . . . . . . . . 260,274 21 10,042 (34,222) 236,115
Property and equipment - net. . . . . . . . . . . 587,198 1,357 52,946 14,243 14 655,744
Other assets:
Investments in & advances to
joint ventures. . . . . . . . . . . . . . . . 19,810 17,204 - (34,408) 15 2,606
Property held for development or sale . . . . . 3,782 - - - 3,782
Licenses and other intangible assets,
net of accumulated amortization . . . . . . . 61,956 - - - 61,956
Goodwill, net of accumulated amortization . . . 141,622 - - 43,162 16 184,784
Berthing, concession, and leasehold rights,
net of accumulated amortization . . . . . . . 3,963 - - - 3,963
Deferred financing costs, net of
accumulated amortization. . . . . . . . . . . 31,330 - - - 31,330
Notes receivable. . . . . . . . . . . . . . . . 100 - - - 100
Deferred income taxes . . . . . . . . . . . . . 20,043 - - - 20,043
Restricted cash . . . . . . . . . . . . . . . . 3,840 - - - 3,840
Prepaid deposits and other. . . . . . . . . . . 8,491 - 738 - 9,229
------------- ----------- ----------- ------------- -------------
Total assets. . . . . . . . . . . . . . . . $ 1,142,409 $ 18,582 $ 63,726 $ (11,225) $ 1,213,492
============= =========== =========== ============= =============
<PAGE>
LIABILITIES AND STOCKHOLDERS'
EQUITY/MEMBERS' EQUITY
-----------------------------
Current liabilities:
Current maturities of long-term debt. . . . . . $ 16,738 $ 1,700 $ 1,829 $ (3,529) 17 $ 16,738
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . 18,435 205 1,277 - 19,917
Related party . . . . . . . . . . . . . . . . - - 443 - 443
Accrued liabilities:
Interest. . . . . . . . . . . . . . . . . . . 4,898 16 - - 4,914
Payroll and related . . . . . . . . . . . . . 30,375 - - - 30,375
Property and other taxes. . . . . . . . . . . 16,563 - 200 - 16,763
Progressive jackpots and slot club awards . . 6,324 - 883 - 7,207
Amounts due to parent company . . . . . . . . - - - - -
Other . . . . . . . . . . . . . . . . . . . . 20,467 82 3,181 - 23,730
------------- ----------- ----------- ------------- -------------
Total current liabilities . . . . . . . . . 113,800 2,003 7,813 (3,529) 120,087
Long-term debt, less current maturities . . . . . 937,940 9,167 21,505 (30,672) 17 937,940
Deferred income taxes . . . . . . . . . . . . . . 9,673 - - 5,697 18 15,370
Minority interest . . . . . . . . . . . . . . . . 5,333 - - - 5,333
Preferred stock . . . . . . . . . . . . . . . . . - - - - -
Equity:
Common stock. . . . . . . . . . . . . . . . . . 237 - - 62 19 299
Additional paid-in capital. . . . . . . . . . . 63,693 - - 59,037 19 122,730
Retained earnings (deficit)/members' equity . . 11,733 7,412 34,408 (41,820) 20 11,733
------------- ----------- ----------- ------------- --------
Total stockholders' equity/
members' equity . . . . . . . . . . . . . 75,663 7,412 34,408 17,279 134,762
------------- ----------- ----------- ------------- -------------
Total liabilities and stockholders' equity/
members' equity . . . . . . . . . . . . . $ 1,142,409 $ 18,582 $ 63,726 $ (11,225) $ 1,213,492
============= =========== =========== ============= =============
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
1) Reflects proceeds of $475 million from the refinancing of the Senior
Secured Credit Facility, net of $230.9 million of cash paid to refinance certain
debt, $58.9 million of cash paid to LUCK shareholders to purchase the
outstanding stock, $22.4 million paid to redeem the LUCK Preferred Stock, $41.7
million paid in the acquisition of Miss Marquette, $13.0 million in acquisition
and financing costs.
2) Reflects the write down of certain assets including the riverboat and
other equipment related to the Miss Marquette acquisition.
3) Reflects the excess of cost over the estimated fair value of the net
assets acquired in the LUCK and Miss Marquette Acquisitions. The Company has
tentatively allocated the purchase price of these assets at their current net
book values.
4) Reflects certain refinancing costs of $13.0 million, net of the write-off
of deferred financing costs totaling $1.2 million related to debt which was
retired as a result of this transaction.
5) Reflects (1) the deferred tax assets at 40% tax rate associated with
LUCK's purchase of Miss Marquette, and (2) the elimination of LUCK's deferred
tax asset valuation allowance of $15.7 million.
6) Reflects the Current Portion of $ 13.8 million relating to the new Senior
Credit Facility, net of the current portion totaling $8.3 million of debt that
was retired as a result of this transaction.
7) Reflects the accrual of the buyout of the LUCK management contracts.
8) Reflects the reduction of debt owed by Miss Marquette to its parent which
was not included in the purchase of Miss Marquette.
9) Reflects the reduction of other assets related to Miss Marquette.
10) Reflects proceeds of $475 million from the refinancing of the Senior
Secured Credit Facility, net of $222.6 million of cash paid to refinance certain
debt, net of the Current Portion of $ 13.8 million relating to the new Senior
Credit Facility.
11) Reflects the redemption of the Preferred Stock of LUCK.
12) Reflects the elimination of the Common Stock, Additional Paid-in Capital
and Retained Earnings (Deficit) of LUCK and Miss Marquette in consolidation with
ISLE.
13) Reflects the pay-off of $34.2 million of debt related to the BRDC and
Bettendorf Acquisitions and the elimination of BRDC's cash.
14) Reflects the write up of land related to the BRDC Acquisition to its
current fair value.
15) Reflects the elimination of the Investment in Subsidiary (Bettendorf)
owned separately by LUCK and BRDC.
16) Reflects the excess of cost over the estimated fair market value of the
net assets acquired in the BRDC and Bettendorf Acquisitions. The Company has
tentatively allocated the purchase price of these assets (with the exception of
the land discussed above) at their current net book values.
17) Reflects the pay-off of debt related to the BRDC and Bettendorf
Acquisitions.
<PAGE>
ISLE OF CAPRI CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(continued)
18) Reflects the estimated deferred tax liabilities at 40% tax rate
associated with the purchase of BRDC.
19) Reflects the issuance of ISLE Common Stock as part of the BRDC
Acquisition.
20) Reflects the elimination of the Retained Earnings / Members' Equity of
BRDC and Bettendorf, respectively, in consolidation with Isle.
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended April 25, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
12 Fiscal 12 Fiscal
Months (1) Months (1)
Ended Ended
April 25, March 31, March 31,
1999 1999 1999
ISLE LUCK GSMC (MM)
<S> <C> <C> <C> <C> <C>
Historical Historical Historical Adjustments
---------- ---------- ---------- -----------
Revenue
Casino . . . . . . . . . . . . . . . . . $ 424,379 $ 122,113 $ 33,025 $ -
Rooms. . . . . . . . . . . . . . . . . . 10,829 4,324 470 -
Pari-mutuel commissions and fees . . . . 21,351 - - -
Rent . . . . . . . . . . . . . . . . . . - - - -
Management fees from unconsolidated
joint venture. . . . . . . . . . . . . - 2,382 - -
Food, beverage and other . . . . . . . . 23,818 18,017 4,329 -
----------- ----------- ------------ --------
Total revenue. . . . . . . . . . . . . 480,377 146,836 37,824 -
Less: Promotional allowances . . . . . - (12,248) (2,028) -
----------- ----------- ------------ --------
Net revenues . . . . . . . . . . . . . 480,377 134,588 35,796 -
Operating Expenses
Casino . . . . . . . . . . . . . . . . . 77,679 50,171 17,250 -
Rooms. . . . . . . . . . . . . . . . . . 3,914 1,755 170 -
Gaming taxes . . . . . . . . . . . . . . 86,855 - - -
Management fees - affiliates . . . . . . - - - -
Pari-mutuel. . . . . . . . . . . . . . . 15,741 - - -
Food and beverage. . . . . . . . . . . . 14,204 4,603 2,183 -
Marine and facilities. . . . . . . . . . 28,218 - - -
Marketing and administrative . . . . . . 144,541 42,860 7,493 -
Valuation charge . . . . . . . . . . . . 5,097 - - -
Accrued litigation settlement (reversal) (4,215) - - -
Preopening expenses. . . . . . . . . . . 3,320 - - -
Related party license fees . . . . . . . - 3,463 - -
Gain (loss) on sale of assets. . . . . . - 2,848 - -
Rental expenses - affiliates . . . . . . - - - -
Consulting agreement . . . . . . . . . . - - - 500 2
Depreciation and amortization. . . . . . 36,277 8,206 2,433 3,600 3
----------- ----------- ------------ --------
Total operating expenses . . . . . . . 411,631 113,906 29,529 4,100
------------ ------------ ------------- ---------
Operating income . . . . . . . . . . . . 68,746 20,682 6,267 (4,100)
<PAGE>
Interest expense . . . . . . . . . . . . (48,638) (21,572) (2,715) (16,563) 4
Interest income. . . . . . . . . . . . . 2,907 2,226 - -
Minority interest. . . . . . . . . . . . 2,209 - - -
Other. . . . . . . . . . . . . . . . . . - (703) - -
Equity in income (loss) of
unconsolidated joint ventures. . . . . (1,340) 5,043 - -
------------ ------------ ------------- ---------
Income before income taxes and
extraordinary item . . . . . . . . . . 23,884 5,676 3,552 (20,663)
Income tax provision . . . . . . . . . . 11,775 90 1,242 (1,527) 5
----------- ----------- ------------ --------
Income before extraordinary item . . . . 12,109 5,586 2,310 (19,136)
Extraordinary loss on extinguishment of
debt, net of income tax benefit. . . . (36,285) - - -
----------- ----------- ------------ --------
Net income . . . . . . . . . . . . . . . $ (24,176) $ 5,586 $ 2,310 $(19,136)
============ ============ ============= =========
Preferred stock dividends. . . . . . . . - (2,272) - 2,272 6
------------ ------------ ------------- ---------
Income (loss) applicable to
common stockholders. . . . . . . . . . $ (24,176) $ 3,314 $ 2,310 $(16,864)
============ ============ ============= =========
Earnings (loss) per common share:
Income (loss) before extraordinary
item and preferred dividends . . . . $ 0.51 $ 1.14
Extraordinary loss, net. . . . . . . . (1.54) -
------------ ------------
Net income (loss) applicable to
common stockholders. . . . . . . . . $ (1.03) $ 0.68
============ ============
Earnings (loss) per common
share - assuming dilution
Income (loss) before extraordinary
item and preferred dividends . . . . $ 0.51 $ 1.14
Extraordinary loss, net. . . . . . . . (1.52) -
------------ ------------
Net income (loss) applicable to
common stockholders. . . . . . . . . $ (1.01) $ 0.68
============ ============
Weighted average basic shares. . . . . . 23,569 4,881
Weighted average diluted shares. . . . . 23,859 4,881
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended April 25, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
12 Fiscal 12 Fiscal
Months (1) Months (1)
ISLE Ended Ended
LUCK-MM March 31, March 31,
Pro Forma 1999 1999 Pro Forma
Condensed BRDC LLB Condensed
<S> <C> <C> <C> <C> <C> <C>
Consolidated Historical Historical Adjustments Consolidated
------------ ---------- ---------- ----------- ------------
Revenue
Casino . . . . . . . . . . . . . . . . . $ 579,517 $ - $ 82,986 $ - $662,503
Rooms. . . . . . . . . . . . . . . . . . 15,623 - 2,125 - 17,748
Pari-mutuel commissions and fees . . . . 21,351 - - - 21,351
Rent . . . . . . . . . . . . . . . . . . - 1,871 - (1,800) 7 71
Management fees from unconsolidated
joint venture. . . . . . . . . . . . . 2,382 325 - (2,707) 8 -
Food, beverage and other . . . . . . . . 46,164 - 7,747 (2,268) 9 51,643
----------- ----------- ------------ ----------- --------
Total revenue. . . . . . . . . . . . . 665,037 2,196 92,858 (6,775) 753,316
Less: Promotional allowances . . . . . (14,276) - (5,161) - (19,437)
----------- ----------- ------------ ----------- --------
Net revenues . . . . . . . . . . . . . 650,761 2,196 87,697 (6,775) 733,879
Operating Expenses
Casino . . . . . . . . . . . . . . . . . 145,100 - 22,542 - 167,642
Rooms. . . . . . . . . . . . . . . . . . 5,839 - 1,364 - 7,203
Gaming taxes . . . . . . . . . . . . . . 86,855 - 20,717 - 107,572
Management fees - affiliates . . . . . . - - 2,382 (2,382) 8 -
Pari-mutuel. . . . . . . . . . . . . . . 15,741 - - - 15,741
Food and beverage. . . . . . . . . . . . 20,990 - 3,057 - 24,047
Marine and facilities. . . . . . . . . . 28,218 - 2,470 - 30,688
Marketing and administrative . . . . . . 194,894 112 15,244 (325) 8 209,925
Valuation charge . . . . . . . . . . . . 5,097 - - - 5,097
Accrued litigation settlement (reversal) (4,215) - - - (4,215)
Preopening expenses. . . . . . . . . . . 3,320 - 1,157 - 4,477
Related party license fees . . . . . . . 3,463 - - - 3,463
Gain (loss) on sale of assets. . . . . . 2,848 - (259) - 2,589
Rental expenses - affiliates . . . . . . - - 4,343 (4,068) 7,9 275
Consulting agreement . . . . . . . . . . 500 - - - 500
Depreciation and amortization. . . . . . 50,516 187 2,819 1,726 10 55,248
----------- ----------- ------------ ----------- ---------
Total operating expenses . . . . . . . 559,166 299 75,836 (5,049) 630,252
----------- ----------- ------------ ----------- ---------
Operating income . . . . . . . . . . . . 91,595 1,897 11,861 (1,726) 103,627
<PAGE>
Interest expense . . . . . . . . . . . . (89,488) (910) (1,401) 2,311 11 (89,488)
Interest income. . . . . . . . . . . . . 5,133 - 145 - 5,278
Minority interest. . . . . . . . . . . . 2,209 - - - 2,209
Other. . . . . . . . . . . . . . . . . . (703) - - - (703)
Equity in income (loss) of
unconsolidated joint ventures. . . . . 3,703 5,043 - (10,086) 12 (1,340)
----------- ----------- ------------ ----------- ---------
Income before income taxes and
extraordinary item . . . . . . . . . . 12,449 6,030 10,605 (9,501) 19,583
Income tax provision . . . . . . . . . . 11,580 - - (1,257) 5 10,323
----------- ----------- ------------ ----------- ---------
Income before extraordinary item . . . . 869 6,030 10,605 (8,244) 9,260
Extraordinary loss on extinguishment of
debt, net of income tax benefit. . . . (36,285) - - - (36,285)
----------- ----------- ------------ ----------- ---------
Net income . . . . . . . . . . . . . . . $ (35,416) $ 6,030 $ 10,605 $ (8,244) $(27,025)
============ ============ ============= =========== =========
Preferred stock dividends. . . . . . . . - - - - -
------------ ------------ ------------- ----------- ---------
Income (loss) applicable to
common stockholders. . . . . . . . . . $ (35,416) $ 6,030 $ 10,605 $ (8,244) $(27,025)
============ ============ ============= =========== =========
Earnings (loss) per common share:
Income (loss) before extraordinary
item and preferred dividends . . . . . . . . . . . .$ 15,075.00 $ 0.31
Extraordinary loss, net. . . . . . . . . . . . . . . . - (1.22)
---------------- ------------
Net income (loss) applicable to
common stockholders. . . . . . . . . . . . . . . . .$ 15,075.00 $ (0.91)
================ ============
Earnings (loss) per common
share - assuming dilution
Income (loss) before extraordinary
item and preferred dividends . . . . . . . . . . . .$ 15,075.00 $ 0.31
Extraordinary loss, net. . . . . . . . . . . . . . . . - (1.21)
---------------- ------------
Net income (loss) applicable to
common stockholders. . . . . . . . . . . . . . . . .$ 15,075.00 $ (0.90)
=============== ============
Weighted average basic shares. . . . . . . . . . . . . . . 0.400 13 29,799
Weighted average diluted shares. . . . . . . . . . . . . . 0.400 13 30,089
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Fiscal Year Ended April 25, 1999
1) The historical financial statements have been updated to a period within
93 days of ISLE's fiscal year end of April 25, 1999, and reflects 12 months
ended March 31, 1999.
2) Reflects compensation expense related to a consulting, advisory and
noncompete agreement with a former LUCK shareholder.
3) Reflects the amortization of goodwill related to the LUCK and Miss
Marquette Acquisitions. Goodwill is being amortized over 25 years.
4) Reflects interest expense on the new Senior Credit Facility of $38.3
million and amortization of deferred financing costs related to this debt of
$2.6 million, net of interest expense on debt retired as a result of these
acquisition transactions totaling $24.2 million.
5) Reflects income tax effects of pro forma adjustments.
6) Reflects the redemption of the Preferred Stock of LUCK.
7) Reflects the elimination of land rental revenue received by BRDC from
Bettendorf and the corresponding elimination of land rental expense on
Bettendorf's books.
8) Reflects the elimination of Casino Management Fees received by LUCK from
Bettendorf and Vessels Management Fees received by BRDC from Bettendorf and the
corresponding elimination of Casino Management Fees expense and Vessels
Management Fees expense on Bettendorf's books.
9) Reflects the elimination of vessel rental revenue received by LUCK from
Bettendorf and the corresponding elimination of vessel rental expense on
Bettendorf's books.
10) Reflects the amortization of goodwill related to the BRDC Acquisition.
Goodwill is being amortized over 25 years.
11) Reflects the reduction of interest expense related to the pay-off of
debt as part of the BRDC Acquisition.
12) Reflects the elimination of Equity in Income of Unconsolidated
Subsidiaries for LUCK and BRDC related to their ownership interests in
Bettendorf.
13) Reflects the issuance of ISLE Common Stock as part of the BRDC
Acquisition.
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Fiscal Months Ended October 24, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
6 Fiscal 6 Fiscal
Months (1) Months (1)
Ended Ended
October 24, Sept. 30, Sept. 30,
1999 1999 1999
ISLE LUCK GSMC (MM)
<S> <C> <C> <C> <C> <C>
Historical Historical Historical Adjustments
---------- ---------- ---------- -----------
Revenue
Casino. . . . . . . . . . . . . . . . $ 269,813 $ 65,541 $ 16,986 $ -
Rooms . . . . . . . . . . . . . . . . 5,445 3,191 281 -
Pari-mutuel commissions and fees. . . 8,349 - - -
Rent. . . . . . . . . . . . . . . . . - - - -
Management fees from unconsolidated
joint venture . . . . . . . . . . . - 1,456 - -
Food, beverage and other. . . . . . . 13,595 10,045 2,531 -
----------- ----------- ------------ ---------
Total revenue . . . . . . . . . . . 297,202 80,233 19,798 -
----------- ----------- ------------ ---------
Less: Promotional allowances. . . . - (7,559) (1,168) -
Net revenues. . . . . . . . . . . . 297,202 72,674 18,630 -
Operating Expenses
Casino. . . . . . . . . . . . . . . . 50,204 27,767 8,511 -
Rooms . . . . . . . . . . . . . . . . 2,448 951 91 -
Gaming taxes. . . . . . . . . . . . . 53,748 - - -
Management fees - affiliates. . . . . - 2,054 - -
Pari-mutuel . . . . . . . . . . . . . 6,466 - - -
Food and beverage . . . . . . . . . . 8,309 2,461 1,151 -
Marine and facilities . . . . . . . . 18,545 - - -
Marketing and administrative. . . . . 91,378 24,067 3,382 -
Preopening expenses . . . . . . . . . 3,420 437 - -
Related party license fees. . . . . . - 1,886 - -
Rental expenses - affiliates. . . . . - - - -
Consulting agreement. . . . . . . . . - - - 250 2
Depreciation and amortization . . . . 17,925 4,670 1,247 1,800 3
----------- ----------- ------------ ---------
Total operating expenses. . . . . . 252,443 64,293 14,382 2,050
------------ ------------ ------------- ---------
Operating income. . . . . . . . . . . 44,759 8,381 4,248 (2,050)
<PAGE>
Interest expense. . . . . . . . . . . (25,565) (10,739) (1,161) (8,525) 4
Interest income . . . . . . . . . . . 1,543 966 - -
Gain (loss) on sale of assets . . . . 3,106 - - -
Minority interest . . . . . . . . . . (1,191) - - -
Other . . . . . . . . . . . . . . . . - (1) - -
Equity in income (loss) of
unconsolidated joint ventures . . . 637 3,830 - -
------------ ------------ ------------- ---------
Income before income taxes. . . . . . 23,289 2,437 3,087 (10,575)
Income tax provision. . . . . . . . . 10,129 60 1,080 (185) 5
------------ ------------ ------------- ---------
Net income. . . . . . . . . . . . . . $ 13,160 $ 2,377 $ 2,007 $(10,390)
============ ============ ============= =========
Preferred stock dividends . . . . . . - (1,239) - 1,239 6
------------ ------------ ------------- ---------
Income (loss) applicable to
common stockholders . . . . . . . . $ 13,160 $ 1,138 $ 2,007 $ (9,151)
============ ============ ============= =========
Earnings (loss) per common share:
Income (loss) before extraordinary
item and preferred dividends. . . $ 0.56 $ 0.49
Extraordinary loss, net . . . . . . - -
------------ ------------
Net income (loss) applicable to
common stockholders . . . . . . . $ 0.56 $ 0.23
============ ============
Earnings (loss) per common
share - assuming dilution
Income (loss) before extraordinary
item and preferred dividends. . . $ 0.53 $ 0.49
Extraordinary loss, net . . . . . . - -
------------ ------------
Net income (loss) applicable to
common stockholders . . . . . . . $ 0.53 $ 0.23
============ ============
Weighted average basic shares . . . . 23,643 4,881
Weighted average diluted shares . . . 24,946 4,881
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Fiscal Months Ended October 24, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
6 Fiscal 6 Fiscal
Months (1) Months (1)
ISLE Ended Ended
LUCK-MM Sept. 30, Sept. 30,
Pro Forma 1999 1999 Pro Forma
Condensed BRDC LLB Condensed
<S> <C> <C> <C> <C> <C> <C>
Consolidated Historical Historical Adjustments Consolidated
------------ ---------- ---------- ----------- ------------
Revenue
Casino. . . . . . . . . . . . . . . . $ 352,340 $ - $ 45,764 $ - $398,104
Rooms . . . . . . . . . . . . . . . . 8,917 - 2,319 - 11,236
Pari-mutuel commissions and fees. . . 8,349 - - - 8,349
Rent. . . . . . . . . . . . . . . . . - 900 - (900) 7 -
Management fees from unconsolidated
joint venture . . . . . . . . . . . 1,456 162 - (1,618) 8 -
Food, beverage and other. . . . . . . 26,171 - 4,723 (1,134) 9 29,760
----------- ----------- ------------ ------------- ---------
Total revenue . . . . . . . . . . . 397,233 1,062 52,806 (3,652) 447,449
Less: Promotional allowances. . . . (8,727) - (2,953) - (11,680)
----------- ----------- ------------ ------------- ---------
Net revenues. . . . . . . . . . . . 388,506 1,062 49,853 (3,652) 435,769
Operating Expenses
Casino. . . . . . . . . . . . . . . . 86,482 - 12,697 - 99,179
Rooms . . . . . . . . . . . . . . . . 3,490 - 1,032 - 4,522
Gaming taxes. . . . . . . . . . . . . 53,748 - 11,593 - 65,341
Management fees - affiliates. . . . . 2,054 - 1,456 (1,456) 8 2,054
Pari-mutuel . . . . . . . . . . . . . 6,466 - - - 6,466
Food and beverage . . . . . . . . . . 11,921 - 1,408 - 13,329
Marine and facilities . . . . . . . . 18,545 - 1,199 - 19,744
Marketing and administrative. . . . . 118,827 55 7,869 (162) 8 126,589
Preopening expenses . . . . . . . . . 3,857 - 46 - 3,903
Related party license fees. . . . . . 1,886 - - - 1,886
Rental expenses - affiliates. . . . . - - 2,244 (2,034) 7,9 210
Consulting agreement. . . . . . . . . 250 - - - 250
Depreciation and amortization . . . . 25,642 42 1,854 863 10 28,401
----------- ----------- ------------ ------------- ---------
Total operating expenses. . . . . . 333,168 97 41,398 (2,789) 371,874
----------- ----------- ------------ ------------- ---------
Operating income. . . . . . . . . . . 55,338 965 8,455 (863) 63,895
<PAGE>
Interest expense. . . . . . . . . . . (45,990) (427) (901) 1,328 11 (45,990)
Interest income . . . . . . . . . . . 2,509 4 108 - 2,621
Gain (loss) on sale of assets . . . . 3,106 - (2) - 3,104
Minority interest . . . . . . . . . . (1,191) - - - (1,191)
Other . . . . . . . . . . . . . . . . (1) - - - (1)
Equity in income (loss) of
unconsolidated joint ventures . . . 4,467 3,829 - (7,659) 12 637
------------ ------------ ------------- -------------- --------
Income before income taxes. . . . . . 18,238 4,371 7,660 (7,194) 23,075
Income tax provision. . . . . . . . . 11,084 - - (609) 5 10,475
------------ ------------ ------------- -------------- --------
Net income. . . . . . . . . . . . . . $ 7,155 $ 4,371 $ 7,660 $ (6,585) $ 12,600
============ ============ ============= ============== =========
Preferred stock dividends . . . . . . - - - - -
------------ ------------ ------------- -------------- --------
Income (loss) applicable to
common stockholders . . . . . . . . $ 7,155 $ 4,371 $ 7,660 $ (6,585) $ 12,600
============ ============ ============= ============== =========
Earnings (loss) per common share:
Income (loss) before extraordinary
item and preferred dividends. . . . . . . . . . $ 10,927.50 $ 0.42
Extraordinary loss, net . . . . . . . . . . . . . - -
-------------- --------
Net income (loss) applicable to
common stockholders . . . . . . . . . . . . . . $ 10,927.50 $ 0.42
============== ========
Earnings (loss) per common
share - assuming dilution
Income (loss) before extraordinary
item and preferred dividends. . . . . . . . . . $ 10,927.50 $ 0.40
Extraordinary loss, net . . . . . . . . . . . . . - -
-------------- --------
Net income (loss) applicable to
common stockholders . . . . . . . . . . . . . . $ 10,927.50 $ 0.40
============== ========
Weighted average basic shares . . . . . . . . . . . . . 0.400 13 29,873
Weighted average diluted shares . . . . . . . . . . . . 0.400 13 31,176
</TABLE>
<PAGE>
ISLE OF CAPRI CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Six Months Ended October 24, 1999
1) The historical financial statements have been updated to a period within
93 days of ISLE's six months ended October 24, 1999, and reflects 6 months
ended September 30, 1999.
2) Reflects compensation expense related to a consulting, advisory and
noncompete agreement with a former LUCK shareholder.
3) Reflects the amortization of goodwill related to the LUCK and Miss
Marquette Acquisitions. Goodwill is being amortized over 25 years.
4) Reflects interest expense on the new Senior Credit Facility of $19.1
million and amortization of deferred financing costs related to this debt of
$1.3 million, net of interest expense on debt retired as a result of these
acquisition transactions totaling $11.9 million.
5) Reflects income tax effects of pro forma adjustments.
6) Reflects the redemption of the Preferred Stock of LUCK.
7) Reflects the elimination of land rental revenue received by BRDC from
Bettendorf and the corresponding elimination of land rental expense on
Bettendorf's books.
8) Reflects the elimination of Casino Management Fees received by LUCK from
Bettendorf and Vessels Management Fees received by BRDC from Bettendorf and the
corresponding elimination of Casino Management Fees expense and Vessels
Management Fees expense on Bettendorf's books.
9) Reflects the elimination of vessel rental revenue received by LUCK from
Bettendorf and the corresponding elimination of vessel rental expense on
Bettendorf's books.
10) Reflects the amortization of goodwill related to the BRDC Acquisition.
Goodwill is being amortized over 25 years.
11) Reflects the reduction of interest expense related to the pay-off of
debt as part of the BRDC Acquisition.
12) Reflects the elimination of Equity in Income of Unconsolidated
Subsidiaries for LUCK and BRDC related to their ownership interest in
Bettendorf.
13) Reflects the issuance of ISLE Common Stock as part of the BRDC
Acquisition.
<PAGE>
7 (c) Exhibits
--------
Exhibit No. Description
- ------------ -----------
Exhibit 2.1 Agreement and Plan of Merger, dated as of October 5, 1999,
incorporated herein by reference to Exhibit 2.1 of Isle's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 15, 1999.
Exhibit 2.2 Agreement and Plan of Merger, dated as of December 19, 1999,
incorporated herein by reference to Exhibit 2.1 of Isle's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 30, 1999.
Exhibit 2.3 First Amendment dated as of October 5, 1999, to the Amended and
Restated Purchase Agreement dated as of August 31, 1999,
effective as of August 19, 1999, by and among Lady Luck Gaming
Corporation, Gemini, Inc., International Marco Polo's Services,
Inc. and Andrew H. Tompkins, incorporated herein by reference
to Exhibit 2.2 of Lady Luck Gaming Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission
on October 18, 1999.
Exhibit 99.1 Press Release dated March 2, 2000.
<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, hereunto duly authorized.
ISLE OF CAPRI CASINOS, INC.
Dated: March 07, 2000 By: /s/ Rexford A. Yeisley
--------------------------
Rexford A. Yeisley, Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ------------ -----------
Exhibit 2.1 Agreement and Plan of Merger, dated as of October 5, 1999,
incorporated herein by reference to Exhibit 2.1 of Isle's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 15, 1999.
Exhibit 2.2 Agreement and Plan of Merger, dated as of December 19, 1999,
incorporated herein by reference to Exhibit 2.1 of Isle's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 30, 1999.
Exhibit 2.3 First Amendment dated as of October 5, 1999, to the Amended
and Restated Purchase Agreement dated as of August 31, 1999,
effective as of August 19, 1999, by and among Lady Luck Gaming
Corporation, Gemini, Inc., International Marco Polo's Services,
Inc. and Andrew H. Tompkins, incorporated herein by reference
to Exhibit 2.2 of Lady Luck Gaming Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission
on October 18, 1999.
Exhibit 99.1 Press Release dated March 2, 2000.
<PAGE>
[COMPANY LETTERHEAD]
Isle of Capri Casinos, Inc. Becomes One of 10-Largest Publicly Owned Gaming
Companies in U.S. with completion of Lady Luck Acquisition.
BILOXI, Miss., March 2--After operating for less than eight years, Isle of Capri
Casinos, Inc. (NASDAQ: ISLE) has grown to one of the 10-largest publicly held
----
gaming companies in the United States with the completion today of the Lady Luck
Gaming Corporation acquisition by means of a cash merger.
Lady Luck has become a wholly-owned subsidiary of Isle of Capri Casinos,
IncCommon stockholders of Lady Luck received $12 per share and Lady Luck
redeemed all outstanding preferred shares and its $173.5 million, 11 7/8 percent
First Mortgage Notes due 2001.
Concurrent with the closing of the Lady Luck merger, Isle of Capri Casinos Inc.
completed two other transactions: the acquisition, also by merger, of BRDC,
Inc., which owned 50 percent of the Lady Luck Bettendorf casino and hotel that
was not owned by Lady Luck, and the acquisition of Lady Luck's trademark and
related intellectual property form Lady Luck's former chairman.
In the BRDC acquisition, Isle of Capri issued 6.3 million shares of common stock
to the shareholders of BRDC, Inc., who were members of the family of Bernard
Goldstein, chairman and chief executive officer of Isle of Capri Casinos, Inc.
The transactions complete the acquisition of Lady Luck-owned properties in Lula
and Natchez, Mississippi and Bettendorf and Marquette, Iowa. Isle of Capri
expects to complete the pending acquisition of the Lady Luck Casino & Hotel in
Las Vegas prior to the end of 2000 upon approval of Nevada gaming regulators.
The acquisitions were financed through a $600 million senior secured credit
facility arranged by CIBC World Markets, which replaces Isle of Capri Casinos,
Inc.'s existing credit facility.
Bernard Goldstein, Isle of Capri Casinos, Inc. chairman of the board and chief
executive officer, said, "This merger elevates Isle of Capri Casinos, Inc. to a
formidable player in the gaming industry; it carries through our corporate goal
to successfully extend the Isle family."
Goldstein continued, " We are quite pleased with the success and growth of our
company since its inception in 1992. We are confident that this merger will be
beneficial to our shareholders, our company, its employees and our customers."
John M. Gallaway, Isle of Capri Casinos, Inc. president and chief operating
officer noted, "This acquisition not only increases our number of Isle
properties to 10, it increases our brand-awareness and an opportunity to further
develop our company. As we combine our existing management team with that of
Lady Luck, we will create a larger company focused on continuing customer
loyalty and satisfaction in the Isle tradition."
Isle of Capri Casinos, Inc. owns and operates riverboat, dockside and land-based
casinos at 10 locations, including the Isle of Capri Casino Crowne Plaza Resort
in Biloxi, Miss.; the Isle of Capri Casino & Hotel in Vicksburg, Miss.; the Isle
of Capri Casino & Hotel in Bossier City, La.; two riverboats operating as the
Isle of Capri Casino & Hotel in Lake Charles, La.; the Isle of Capri Casino in
Black Hawk, Co. [through a 57-percent-owned. subsidiary]; and the Isle of Capri
Casino in Tunica, Miss., the Lady Luck Casino & Hotels in Lula, Miss., Lady Luck
Casino & Hotel in Natchez, Miss., Lady Luck Casino & Hotel in Bettendorf, Iowa
and the Miss Marquette Casino & Hotel in Marquette, Iowa. The company also
operates Pompano Park Harness Racing Track in Pompano Beach, Fla., and through a
joint venture the Enchanted Capri cruise ship, which features an Isle of Capri
Casino, sailing from New Orleans.
This press release may be deemed to contain forward-looking statements which are
subject to change. These forward-looking statements may be significantly
impacted, either positively or negatively by various factors including without
limitation, licensing and other regulatory approvals, financing sources,
development and construction activities, costs and delays, permits, competition
and business conditions in the gaming industry. Additional information
concerning potential factors that could affect the company's financial
condition, results of operations and expansion projects, is included in the
fillings of the company with the Securities and Exchange Commission, including,
but not limited to, its annual report and its form 10-K for the fiscal year
ended April 25, 1999.
Contacts: Allan B. Solomon, Executive President-561.995.6660
Rex Yeisley, Chief Financial Officer-228.396.7052
NOTE: Other Isle of Capri Casinos, Inc. press releases and a corporate profile
are available by fax at no charge. For a menu of available Isle of Capri
Casinos, Inc. press releases, call 800.758.5804, ext. 145913 or log on to
http://www.prnewswire.com. Isle of Capri Casinos, Inc.'s home page is
-------------------
http://www.theislecorp.com.
--------------------
