Isle of Capri considering deals for LV, Mississippi properties

John Porretto

Thursday, June 20, 2002 | 9:57 a.m.

JACKSON, Miss. -- Isle of Capri Casinos Inc. is reviewing proposals for the sale of its casinos in Tunica County and Las Vegas but isn't identifying the suitors.

Isle officials said they hope to close deals by year's end. The Biloxi-based company owns 15 casinos in Mississippi, Louisiana, Colorado, Iowa, Missouri and Nevada.

"We're in negotiations," Executive Vice President and General Counsel Allan Solomon said Tuesday on a conference call to discuss fourth-quarter and fiscal year-end financial results.

The Isle announced plans in March to sell the two properties because they were not performing well.

In the quarter that ended April 28, the Isle in Tunica saw its revenue decline 14 percent from the year-ago period. Sales at the Las Vegas property were off 17 percent for the same period.

The Tunica casino, which opened in 1999, has struggled in a very competitive market. The downtown Las Vegas casino, the Lady Luck, was part of the deal when the Isle bought Lady Luck Gaming Corp. for $400 million in 2000.

Overall, the company said it was pleased with its results. The Isle reported quarterly earnings of 65 cents a share, excluding one-time items, beating analysts' forecasts by 11 cents.

The company had $300 million in quarterly revenue, 9 percent above the year-ago quarter. Annual revenue rose 10 percent.

The Isle had a one-time expense of some $40 million in the quarter to write down assets related to the Tunica and Las Vegas properties. With that and other one-time charges, the company reported a loss of $22 million, or 78 cents a share, compared with net income of $7.9 million, or 26 cents a share, in the fourth quarter of 2001.

Elsewhere in Mississippi, the company saw quarterly revenue rise 12 percent at its casino in Lula and 3 percent in Biloxi. Revenue in Natchez was nearly the same quarter to quarter, while business in Vicksburg was off 9 percent because of what the company said was increased competition from a spruced up Ameristar casino.

"The company is doing a good job of managing its portfolio in some difficult market conditions," said Eric Hausler, an industry analyst with Bear Stearns in New York, who rates Isle's stock "neutral."