Share buyback announced after earnings warning

Wednesday, Jan. 17, 2001 | 11:27 a.m.

Two days after issuing an earnings warning, Isle of Capri Casinos Inc. announced plans to repurchase as much as 5 percent of its own stock.

The Biloxi, Miss., company's board authorized the repurchase of up to 1.5 million shares, with no expiration date specified. The buyback would be in addition to a 1.5 million share buyback authorized previously by Isle's board; the company has already repurchased 1.4 million shares under that plan.

Isle had 30.6 million shares outstanding as of Dec. 4. The company may purchase shares both on the open market and in private transactions.

"We believe Isle of Capri Casinos Inc.'s stock is currently undervalued, and we currently have an opportunity to repurchase shares at what we believe are very attractive levels," said Bernard Goldstein, company chairman.

Isle closed Friday at $8.31, well below its 52-week high of $17.75.

The announcement came just days after Isle warned that it expects fourth-quarter earnings to be "substantially below" analyst estimates of 19 to 20 cents a share. Earnings for the quarter ending Jan. 28 could be in the break-even range, Isle said.

Isle blamed the shortfall on severe winter weather in most of the company's markets, delays in construction at its facilities in Lula, Miss., and Kansas City, Mo., and writeoffs associated with the bankruptcy and closure of Capri Cruises, which operated a cruise ship out of New Orleans. Isle owned 50 percent of Capri Cruises.

Isle operates 13 casinos in Mississippi, Louisiana, Colorado, Iowa, Missouri and Nevada. It is the owner of the Lady Luck hotel-casino in downtown Las Vegas.

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