Isle of Capri Casinos Reports Terrible Fourth Quarter

The company's stock closed yesterday at $4.45 per share, a drop of over 80% during the last year.

Isle of Capri Casinos released its fourth quarter financial report this morning on a conference call, and the numbers were significantly worse than expected, with an explanation.

The company reported losses of over $51 million, or about $1.66 per share, against revenue of $298.3 million. The revenue climbed almost 18% from the same quarter last year, when the figure was $253.4 million; but industry analysts had projected a slightly higher number, and most if not all additional income was due to recent venue openings.

Operations in existence for over a year decreased in revenue by $21.3 million, to $218 million, a drop more than 10%. Isle of Capri management attributed the decline to flooding along the Mississippi, which affected and temporarily closed riverboats; a smoking ban in Colorado; and increased competition in Biloxi. Only the flooding situation seems likely to change.

A major factor in the company's big loss report is an impairment charge of $78 million involving the devaluing of assets owned in the United Kingdom. Isle of Capri is exploring options for these properties.

Net revenue for the fiscal year was up 12.3%, topping $1.1 billion.

The company's stock closed yesterday at $4.45 per share, a drop of over 80% during the last year. It opened today at $5.51, obviously in anticipation of far better news than was received; by late afternoon, it had fallen to $4.35.

In an attempt to paint a rosier future, the company did discuss spending about $20 million to rebrand several of its operations under the name Lady Luck, and revealed a project to refurbish its Biloxi casino at a cost of $160 million.

Even after the British write-off, other Isle projects seemed to decline once the opening honeymoons had passed. This company does not seem to know how to retain its clientele.