Isle of Capri Casinos, Inc. (ISLE)
Q3 2008 Earnings Call Transcript
March 3, 2009 11:00 am ET
James B. Perry – Executive Vice Chairman & Chief Executive Officer
Virginia M. McDowell – President & Chief Operating Officer
Dale R. Black – Senior Vice President & Chief Financial Officer
Lawrence Klatzkin – Jefferies & Co.
Steven Wieczynski – Stifel Nicolaus & Company, Inc.
Dennis Forst – Keybanc Capital Markets
Justin Sebastiano – Morgan Joseph
David Hargreaves – Sterne, Agee
[Shabbat Badhani] – Claren Road Asset Management
Howard Bryerman – Evergreen Investments
Susan Berliner – JP Morgan
Previous Statements by ISLE
» Isle of Capri Casinos, Inc. F2Q10 (Qtr End 10/25/09) Earnings Call Transcript
» Isle of Capri Casinos F1Q10 (Qtr End 07/26/09) Earnings Call Transcript
» Isle of Capri Casinos, Inc. F2Q09 (Qtr End 10/26/08) Earnings Call Transcript
Before we begin, I will read the safe harbor statement. This conference call could contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current belief and expectations of Isle of Capri Casinos’ management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements.
These statements may be significantly impacted either positively or negatively by various factors including without limitation, licensing or other regulatory approvals, financing sources, development and construction activities, costs and delays, permits, weather, competition and business conditions in the gaming industry. Such risks are more fully discussed in Isle of Capri Casinos’ filings with the Securities and Exchange Commission. The information set forth herein should be considered in light of such risks.
Isle of Capri Casinos does not assume any obligation to update the information contained in this conference call. Also, this conference call could contain non-GAAP financial measures such as EBITDA. Following this call, a reconciliation of non-GAAP financial measures to GAAP financial measures will be posted on the Isle of Capri website.
We are joined on the call today by Jim Perry, Executive Vice Chairman and Chief Executive officer, Virginia McDowell, President and Chief Operating Officer, and Dale Black, Chief Financial Officer.
With that I would like to turn the call over to Virginia McDowell.
Good morning. Thank you Stacey. Thank you everybody for joining us on our call. I'm going to get us started today with a few comments on the quarter and the trends that we're now seeing. Dale Black is going to go over a few financial items and then we'll open it for your questions.
As highlighted in our press release, there are two specific areas of our business in which we are particularly pleased. First, it's no surprise I'm sure that we're feeling the effects of weakened national economy on our operation as are nearly all gaming companies. But our cost cutting efforts of both our properties and our corporate office have enabled us to offset all, but $12 million of the $42 million net revenue decline for the first three quarters of the fiscal year.
This decrease in our operating expenses has been critical to our efforts to keep EBITDA as stable as possible year-over-year despite the economic pressures that led to about 9% decrease after we adjust our Biloxi insurance settlement and other one-time charges. Secondly, we've not let the global economic issues distract us from our strategic goal of strengthening our operations.
We've spent the past year clearly focused on improving our customer service and the overall experience of the guests at our properties, and I am certain that we are succeeding. In fact, we're succeeding at a pace even greater than we had hoped or expected. While we've experienced remarkable improvements within front line departments across the company, our positive guest feedback has already increased by 45%. It’s our belief that the improved experiences that we offer our customers have resulted in an increased share of wallet, while our lower cost bases facilitates higher flow through.
While some of the changes we have made were designed to stave off the effects of the economy, we also recognize that our customers are holding us to higher standard in their competition for the leisure dollars. By listening to our customers in responding to their needs we have been able to provide increased value through the delivery of a more targeted entertainment experience, and as such we continue to be optimistic about our market position as consumer confidence increases.
From a capital perspective, we've completed the exterior of our Lady Luck properties in Caruthersville and Marquette. We've completed the renovation of the Coral Reef hotel in Lula and nearly completed the renovation of the rooms at the end of Lake Charles and the interior of the Caruthersville pavilion. We are also in the process of designing the changes we've planned to make in Colorado following the passage of amendment 50, which enables us to increase our limits hours of operation and introduce new table games.
We did have a difficult quarter in Biloxi in Florida, that was partially balanced by a quarter in Waterloo where EBITDA increased by over 30%. Biloxi continues to be a highly promotional market dependent on costly drive-in business and we continue to lobby in Florida for the legislature to level the playing field and provide the paramutuals with the tools to effectively compete for the Seminole drive. It's our belief that their failure to do so will cost the taxpayers of the state potentially hundreds of millions of dollars in tax revenue.