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Lake Entertainment, Inc. (LACO)
Q4 2007 Earnings Call
March 11, 2008 1:00 pm ET
Lyle Berman – Chairman of the Board & Chief Executive Officer
Timothy J. Cope – President, Chief Financial Officer & Treasurer
Todd Eilers – Roth Capital Partners
Michael J. Grondahl – Key Colony Funds
[Rishi Parikh] – KBC Financial
Clinton Morrison – Feltl & Company
Alex Lieblong – [Inaudible]
Previous Statements by LACO
» Lakes Entertainment, Inc. Q3 2008 Earnings Call Transcript
» Lakes Entertainment, Inc. Q2 2008 Earnings Call Transcript
» Lakes Entertainment, Inc. Q1 2008 Earnings Call Transcript
Timothy J. Cope
Good afternoon and welcome to Lakes Entertainment’s fourth quarter 2007 earnings conference call. On the call with me is Lyle Berman, Lake’s Chairman of the Board and Chief Executive Officer. As we begin our prepared remarks I’d like to remind everyone that this call may contain forward-looking statements within the meaning of Federal Securities law including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts. These forward looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements do not guarantee future performance and there undue reliance should not be placed upon them.
Lyle will begin our discussion today with a general overview and updated on our casino projects. I will then discuss the fourth quarter financial results and recent business events and then we’ll conduct a question and answer session.
Welcome everyone to Lakes’ fourth quarter earnings call. I’d like to start out off by saying that 2007 was a year of progress for Lake with the opening of the Four Winds Casino Resort as well as positive movement on other projects. We plan to build on these accomplishments in 2008 with a pipeline of growth projects that we believe positions us well for long term revenues and earnings growth.
The fourth quarter saw the first full quarter results from the new Four Winds Casino Resorts in New Buffalo, Michigan which we manage for the Pokagon Band of Potawatomi Indians. We are pleased to note that since its opening key performance metrics for the casino have continued to improve. In addition, the Four Winds customer loyalty program continues to rapidly expand and our club membership has greatly exceeded our initial expectations. While we are happy with the early results of the casino we are always working to improve the Four Winds guest experiencing and maximize the operating results. In addition to Four Winds, we continue to see strong results at the Cimarron Casino in Perkins, Oklahoma which we manage for the Iowa Tribe of Oklahoma. The casino which contains 360 Class III slot machines doubled its profits in our first year of management and continues to show steady improvements. Obviously, we are very pleased with the full year results we saw from Cimarron and expect continued solid performance from Cimarron in 2008.
Moving to our development projects, as I review each casino projects please remember they are not in any order of significance or state of completion and of course estimated construction start dates and opening dates are subject to change. We’ll start with the Shingles Spring Casino project near Sacramento, California which is the casino development and management project currently under construction with the Shingle Springs Band of Miwok Indians. We are pleased to note that the development of the casino remains within budget and on schedule for a planned grand opening in late fourth quarter 2008. We are currently in the process of arranging FF&E financing of approximately $65 million. When completed the facility will host approximately 2,100 slot machines and gaming devices, 75 gaming tables, 10 different food and beverage outlets and approximately 3,200 covered parking spaces. We’ll also have a dedicated interchange from US Route 50 which is the road connecting San Francisco and Lake Tahoe allowing easy access for our customers to the casino only a few hundred yards away. With 4 million people living within a 50 mile radius of the casino and only one major competitor in the region, we believe the Shingle Springs project is well positioned to achieve a strong ROI and create shareholder value. You can see webcam shots of the construction on our website at www.LakesEntertainment.com.
The Jamul Indian Village Casino project near San Diego has faced development challenges. There has been incremental progress in our quest to build the casino on the tribes existing six acre reservation as the tribe has recently been improving the road on the reservation to the highway. As I mentioned on last quarter’s call Lakes as also acquired approximately 100 acres of land contiguous to the six acres of the reservation land that could be use for the casino support facilities if the land is taken into trust. Planning is ongoing to redesign the casino to provide for approximately 1,000 Class II gaming devices along with 25 Class II table games. Along with the tribe we are working together to determine when the casino construction can begin, hopefully in late 2008 and we are shooting for operations to commence in 2010.
Now, I’ll discuss our second project with the Iowa Tribe of Oklahoma, the Ioway Casino reserve located on US Route 66 near Chandler, Oklahoma and part of the greater Oklahoma City market. Along with the tribe we are waiting on the Bureau of Indian Affairs for approval of the land blend on which the casino resort will be built. After the BIA approval is received we expect to rapidly receive [inaudible] approval of our management contract, the last step needed before design, financing and construction of the project begins. Once approval is received we expect a 12 to 18 months development and construction time line with a possible open of the Iowa Casino in the fall of 2009. The casino is currently planned to have approximately 1,500 Class III slot machines, 50 table games, four restaurants and a 250 room hotel. The facility is master planned for future development that may include additional gaming space, hotel rooms, a golf course and other market driven amenities.