Isle Of Capri Casinos, Inc. Announces Fiscal 2013 Second Quarter Results

   Isle Of Capri Casinos, Inc. Announces Fiscal 2013 Second Quarter Results

PR Newswire

ST. LOUIS, Nov. 29, 2012

ST. LOUIS, Nov. 29, 2012 /PRNewswire/ --Isle of Capri Casinos, Inc. (NASDAQ:
ISLE) (the "Company") today reported financial results for the second quarter
of fiscal year 2013 ended October 28, 2012 and other Company-related news.

Consolidated Results

The following table outlines the Company's financial results (dollars in
millions, except per shares data, unaudited):

                            Three Months Ended        Six Months Ended
                            October 28,  October 23,  October 28,  October 23,
                            2012         2011         2012         2011
Net revenues                $        $        $        $    
                            223.2        231.4        459.0        459.0
Consolidated adjusted       38.7         41.9         83.7         80.7
EBITDA (1)
Income (loss) from          (4.3)        (1.0)        0.4          (3.6)
continuing operations
Loss from discontinued      (2.3)        (0.5)        (0.4)        (0.2)
operations
Net income (loss)           (6.6)        (1.5)        -            (3.8)
Diluted income (loss) per
share from continuing       (0.11)       (0.03)       0.01         (0.09)
operations
Diluted loss per share from (0.06)       (0.01)       (0.01)       (0.01)
discontinued operations
Diluted income (loss) per   (0.17)       (0.04)       -            (0.10)
share

Virginia McDowell, president and chief executive officer remarked, "The second
quarter was a period of achievements and challenges. Similar to other regional
gaming operators, we experienced softening net revenues during September and
October. Cost containment efforts led to increased adjusted EBITDA and margins
at several of our properties; however we could not overcome the softness in
our Mississippi business."

"We continue to be hampered by several factors in Mississippi which accounted
for more than 150% of our year-over-year property adjusted EBITDA decline.
Some of these factors, such as construction disruption in Vicksburg, will end
in the coming weeks, however others related to market conditions and
operations have the full attention and focus of our team. The balance of our
properties experienced an overall increase in adjusted EBITDA of 2.5%, while
net revenue decreased 1.9%.

"Our new casino property in Cape Girardeau debuted on October 30, our
rebranding project in Vicksburg is nearly complete and the renovation of the
primary Lake Charles hotel tower will be complete by the end of December.
Additionally, we have begun construction on our Lady Luck Casino at Nemacolin
Woodlands Resort in Pennsylvania. We are achieving our goals of renewing our
asset base and restyling our customer experiences."

Operating Results

Net revenues decreased $8.2 million during the period, to $223.2 million.
Consolidated adjusted EBITDA decreased $3.2 million, or 7.6%, to 38.7 million.
This decrease of $3.2 million is attributable to a decrease in adjusted EBITDA
of $3.2 million at our Mississippi properties and a $1.0 million increase in
corporate legal costs, which offset gains in adjusted EBITDA at several of our
other properties.

Diluted loss per share from continuing operations for the quarter was $(0.11)
compared to $(0.03) for the second quarter last year. The results for the
current year were impacted by approximately $2.7 million in preopening costs
associated with Cape Girardeau and $2.5 million of costs associated with the
refinancing of our subordinated debt in July. Before consideration of these
items, diluted earnings per share from continuing operations for the quarter
would have been break-even ($0.00).

As a result of efficiencies in marketing and cost containment efforts, we had
favorable results at the following properties:

  oBlack Hawk – Adjusted EBITDA increased 2.2% to $7.7 million despite a
    decrease in net revenues of 3.9% to $30.7 million, resulting in margin
    improvement of nearly 150 basis points to 25%.
  oPompano – Despite the continued year over year impact of a major expansion
    at a competing facility, adjusted EBITDA increased $0.4 million while net
    revenues increased $0.8 million to $33.7 million. In addition,
    construction was completed to convert the buffet to a Farmer's Pick^® in
    mid-September.
  oQuad Cities and Waterloo – Adjusted EBITDA increased a combined 5.2% to
    $13.9 million on increased revenues of 1.5% to $51.0 million, resulting in
    margin improvement of over 90 basis points to 27.2%. The results were
    also favorably impacted by the successful implementation of Fan Club^® in
    Waterloo and the introduction of our new Lone Wolf^® Bar.
  oLake Charles – Adjusted EBITDA increased $0.3 million despite decreased
    net revenues of $2.9 million for the quarter. Results were negatively
    impacted by construction disruption associated with ongoing renovation of
    the entire hotel tower, which caused an average of approximately 20% of
    our total hotel rooms to be out of service during the quarter.
  oKansas City – Adjusted EBITDA remained flat at $4.1 million despite the
    impact of a new competitor in the market, which resulted in decreased
    revenues of $1.4 million.

Our Mississippi properties faced significant challenges during the quarter,
which contributed to over 150% of our property adjusted EBITDA loss year over
year.

In Vicksburg, our results were impacted by construction disruption associated
with the on-going rebranding of the property to a Lady Luck^® Casino, as we
experienced an average of 200 to 400 slot machines out of service per day.
The results were also impacted by an overall market decline of 6% during the
quarter.

In Natchez, our results were impacted by significant weather disruption and
damage, where our boat was closed for four days due to a storm that caused
meaningful decreased patron count for approximately one month. In addition,
the adverse weather conditions damaged each of the three entrances to the
facility as well as some infrastructure components. The facility continues to
face extraordinarily low river levels, causing our boat to nearly sit on the
bottom of the river, which has severely impacted the entrance and overall
customer experience. We are committed to mitigating the damage done to our
facility, but we expect business to suffer until water levels return to a
reasonable level in this section of the Mississippi River. Additionally,
pending regulatory approval, a new competitor facility is expected to open in
the market before the end of the year.

In Lula, the market changes that occurred following the flooding in last
fiscal year have not improved. The market continues to decline, as customers
continue to patronize the facilities in the Memphis and Little Rock areas that
benefitted from the prior year's flooding. We are pursuing financial
improvements through cost savings and operational consolidations.

Corporate Expenses and Other Items

Corporate and development expenses were $10.8 million for the quarter, an
increase of $1.5 million compared to prior year. Included in the results for
the fiscal 2013 quarter are $1.5 million in refinancing related costs and $1.0
million in increased legal costs offset by lower insurance costs and stock
compensation expenses.

Non-cash stock compensation expense was $1.5 million for the quarter compared
to $2.3 million in the second quarter of fiscal 2012.

Preopening costs associated with Cape Girardeau were $2.7 million.

Discontinued Operations

Included in discontinued operations are the operating results of our Biloxi
property approximately $2.1 million of charges related to Hurricane Isaac for
costs incurred and a credit against the purchase price to satisfy our
obligation to repair the property, as required by the purchase agreement.

Development

We have begun preliminary demolition in advance of construction of Lady Luck
Casino at Nemacolin Woodlands Resort. We currently expect to open Lady Luck
Nemacolin during summer 2013. The facility is planned to include 600 slot
machines, 28 table games, an Otis & Henry's Bar & Grill, and a Lone Wolf Bar.
The Company currently expects the total project to cost approximately $57
million to $60 million, including the $12.5 million license fee. Several
aspects of the project are currently out for bid and we expect to get firm
pricing on those over the next few weeks.

In Vicksburg, our Lady Luck rebranding project is complete, and we will hold
our grand re-opening ceremony tomorrow. The property is a fully-branded Lady
Luck casino, as we have greatly enhanced the exterior and interior, completed
the renovation of the casino floor and have introduced an Otis & Henry's Bar &
Grill and a Lone Wolf Bar. The property also has implemented our Fan Club^®
program.

Capital Structure

As of October 28, 2012, the Company had $75.5 million in cash and cash
equivalents, $1.18 billion in total debt and $199 million in net line of
credit availability.

Second quarter capital expenditures were $46 million, of which $32 million
related to Cape Girardeau, and $14 million at our existing properties. The
Company expects capital expenditures to be approximately $80 million to $90
million for the balance of the fiscal year, including maintenance capital,
final costs in Cape Girardeau and construction costs in Nemacolin of
approximately $20 million to $30 million.

Conference Call Information

Isle of Capri Casinos, Inc. will host a conference call on Thursday, November
29, 2012 at 10:00 am central time during which management will discuss the
financial and other matters addressed in this press release. The conference
call can be accessed by interested parties via webcast through the investor
relations page of the Company's website, www.islecorp.com, or, for domestic
callers, by dialing 877-917-8929. International callers can access the
conference call by dialing 517-308-9020. The conference call reference number
is 311019. The conference call will be recorded and available for review
starting at noon central on Thursday, November 27, 2012, until 11:59 pm
central on Tuesday, December 6, 2012, by dialing 866-463-2179; International:
203-369-1376 and access number 7007.

About Isle of Capri Casinos, Inc.

Isle of Capri Casinos, Inc. is a leading regional gaming and entertainment
company dedicated to providing guests with exceptional experience at each of
the 15 casino properties that it owns and operates, primarily under the Isle
and Lady Luck brands. The Company currently owns and operates gaming and
entertainment facilities in Mississippi, Louisiana, Iowa, Missouri, Colorado
and Florida. We are developing a new facility at the Nemacolin Woodlands
Resort in Western Pennsylvania. More information is available at the
Company's website, www.islecorp.com.

Forward-Looking Statements

This press release may be deemed to contain forward-looking statements, which
are subject to change. These forward-looking statements may be significantly
impacted, either positively or negatively by various factors, including
without limitation, licensing, and other regulatory approvals, financing
sources, development and construction activities, costs and delays, weather,
permits, competition and business conditions in the gaming industry. The
forward-looking statements are subject to numerous risks and uncertainties
that could cause actual results to differ materially from those expressed in
or implied by the statements herein.

Additional information concerning potential factors that could affect the
Company's financial condition, results of operations and expansion projects,
is included in the filings of the Company with the Securities and Exchange
Commission, including, but not limited to, its Form 10-K for the most recently
ended fiscal year.

CONTACTS:
Isle of Capri Casinos, Inc.,
Dale Black, Chief Financial Officer-314.813.9327
Jill Alexander, Senior Director of Corporate Communication-314.813.9368



ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
                           Three Months Ended        Six Months Ended
                           October 28,  October 23,  October 28,  October 23,
                           2012         2011         2012         2011
Revenues:
Casino                     $          $          $          $  
                           234,648     239,707     484,917     474,934
Rooms                      8,328        8,419        16,958       16,891
Food, beverage,            30,437       30,723       63,243       60,350
pari-mutuel and other
Insurance recoveries       -            111          -            111
Gross revenues             273,413      278,960      565,118      552,286
Less promotional           (50,206)     (47,534)     (106,088)    (93,256)
allowances
Net revenues               223,207      231,426      459,030      459,030
Operating expenses:
Casino                     36,802       38,172       75,298       74,143
Gaming taxes               58,619       59,435       120,247      118,952
Rooms                      1,781        1,929        3,554        3,848
Food, beverage,            9,217        9,590        19,321       19,543
pari-mutuel and other
Marine and facilities      13,888       14,933       27,588       29,059
Marketing and              56,464       58,594       114,420      115,541
administrative
Corporate and development  10,777       9,327        19,250       21,593
Preopening                 2,654        27           3,341        63
Depreciation and           16,850       19,646       33,672       38,822
amortization
Total operating expenses   207,052      211,653      416,691      421,564
Operating income           16,155       19,773       42,339       37,466
Interest expense           (21,985)     (21,877)     (42,416)     (43,702)
Interest income            131          192          306          435
Derivative income          176          260          310          29
(expense)
Income (loss) from
continuing operations
before
income taxes               (5,523)      (1,652)      539          (5,772)
Income tax (provision)     1,182        622          (136)        2,183
benefit
Income (loss) from         (4,341)      (1,030)      403          (3,589)
continuing operations
Income (loss) from
discontinued operations
net of income taxes       (2,312)      (427)        (395)        (191)
Net income (loss)          $         $         $       $   
                           (6,653)     (1,457)        8      (3,780)
Income (loss) per common
share-basic:
Income (loss) from         $        $        $       $    
continuing operations      (0.11)      (0.03)      0.01        (0.09)
Income from discontinued
operations,
net of income taxes       (0.06)       (0.01)       (0.01)       (0.01)
Net income (loss)          $        $        $       $    
                           (0.17)      (0.04)        -       (0.10)
Income (loss) per common
share-dilutive:
Income (loss) from         $        $        $       $    
continuing operations      (0.11)      (0.03)      0.01        (0.09)
Income from discontinued
operations,
net of income taxes       (0.06)       (0.01)       (0.01)       (0.01)
Net income (loss)          $        $        $       $    
                           (0.17)      (0.04)        -       (0.10)
Weighted average basic     39,336,134   38,753,049   39,177,208   38,515,099
shares
Weighted average diluted   39,336,134   38,753,049   39,192,075   38,515,099
shares

ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
                                            October 28,       April 29,
                                            2012              2012
ASSETS                                      (unaudited)
Current assets:
Cash and cash equivalents                   $    75,479   $    94,461
Marketable securities                       24,277            24,943
Accounts receivable, net                    8,007             6,941
Insurance receivable                        -                 7,497
Income taxes receivable                     4,723             2,161
Deferred income taxes                       615               627
Prepaid expenses and other assets           28,550            18,950
Assets held for sale                        45,557            46,703
Total current assets                        187,208           202,283
Property and equipment, net                 1,009,406         950,014
Other assets:
Goodwill                                    330,903           330,903
Other intangible assets, net                61,167            56,586
Deferred financing costs, net               18,246            13,205
Restricted cash                             12,916            12,551
Prepaid deposits and other                  7,469             9,428
Total assets                                $  1,627,315     $  1,574,970
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt        $     5,406  $     5,393
Accounts payable                           33,282            23,536
Accrued liabilities:
Payroll and related                         37,043            38,566
Property and other taxes                    25,168            19,522
Interest                                    14,099            9,296
Progressive jackpots and slot club awards   15,136            14,892
Liabilities related to assets held for sale 8,041             4,362
Other                                       40,777            40,549
Total current liabilities                   178,952           156,116
Long-term debt, less current maturities     1,177,065         1,149,038
Deferred income taxes                       35,804            36,057
Other accrued liabilities                   32,162            33,583
Other long-term liabilities                 16,489            16,556
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000  -                 -
shares authorized; none issued
Common stock, $.01 par value; 60,000,000
shares authorized; shares issued:
42,066,148 at October 28, 2012 and          421               421
42,066,148 at April 29, 2012
Class B common stock, $.01 par value;       -                 -
3,000,000 shares authorized; none issued
Additional paid-in capital                  244,656           247,855
Retained earnings (deficit)                 (26,650)          (26,658)
Accumulated other comprehensive (loss)      (544)             (855)
income
                                            217,883           220,763
Treasury stock, 2,577,155 shares at October
28, 2012 and 3,083,867 shares
at April 29, 2012                           (31,040)          (37,143)
Total stockholders' equity                  186,843           183,620
Total liabilities and stockholders' equity  $  1,627,315     $  1,574,970



Isle of Capri Casinos, Inc.
Supplemental Data - Net Revenues
(unaudited, in thousands)
                            Three Months Ended        Six Months Ended
                            October 28,  October 23,  October 28,  October 23,
                            2012         2011         2012         2011
Properties Not Impacted by
Flooding
   Lake Charles, Louisiana  $         $         $         $   
                            29,749       32,617       63,327       68,541
   Kansas City, Missouri    18,012       19,453       36,532       39,111
   Boonville, Missouri      19,798       19,736       40,186       39,823
   Bettendorf, Iowa         19,694       19,130       39,549       39,211
   Marquette, Iowa          7,332        7,271        14,713       14,772
   Waterloo, Iowa           20,925       20,601       42,337       41,101
   Black Hawk, Colorado     30,670       31,905       62,023       63,266
   Pompano, Florida         33,691       32,869       68,376       67,571
                            179,871      183,582      367,043      373,396
Properties Impacted by
Flooding
   Natchez, Mississippi     5,962        7,036        12,963       11,061
   Lula, Mississippi        12,772       14,213       27,403       23,965
   Vicksburg, Mississippi   5,897        7,411        13,455       13,790
   Caruthersville,          8,144        8,204        16,777       15,416
   Missouri
   Davenport, Iowa          10,390       10,516       21,036       20,770
                            43,165       47,380       91,634       85,002
Property Net Revenues       223,036      230,962      458,677      458,398
before Other
Other                       171          464          353          632
Net Revenues from           $          $          $          $  
Continuing Operations       223,207      231,426      459,030      459,030

Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
                 Three Months Ended October 28, 2012
                 Operating  Depreciation  Stock-Based                          Adjusted
                 Income     and           Compensation  Preopening  Financing  EBITDA
                 (Loss)     Amortization
Properties Not
Impacted by
Flooding
 Lake Charles,   $        $         $        $       $      $  
 Louisiana       1,867      2,310            2        -         -      4,179
 Kansas City,    3,152      980           4             -           -          4,136
 Missouri
 Boonville,      5,918      886           6             -           -          6,810
 Missouri
 Bettendorf,     3,578      1,770         4             -           -          5,352
 Iowa
 Marquette, Iowa 1,172      445           5             -           -          1,622
 Waterloo, Iowa  5,218      1,165         6             -           -          6,389
 Black Hawk,     5,435      2,210         14            -           -          7,659
 Colorado
 Pompano,        3,083      1,803         8             -           -          4,894
 Florida
                 29,423     11,569        49            -           -          41,041
Properties
Impacted by
Flooding
 Natchez,        118        359           5             -           -          482
 Mississippi
 Lula,           (803)      1,702         6             -           -          905
 Mississippi
 Vicksburg,      (860)      1,218         5             -           -          363
 Mississippi
 Caruthersville, 593        835           5             -           -          1,433
 Missouri
 Davenport, Iowa 1,566      546           6             -           -          2,118
                 614        4,660         27            -           -          5,301
Total Operating  30,037     16,229        76            -           -          46,342
Properties
 Corporate and   (13,882)   621           1,501         2,654       1,478      (7,628)
 Other
Total            $         $          $        $        $       $ 
                 16,155     16,850        1,577         2,654       1,478      38,714
                 Three Months Ended October 23, 2011
                 Operating  Depreciation  Stock-Based                          Adjusted
                 Income     and           Compensation  Preopening  Financing  EBITDA
                 (Loss)     Amortization
Properties Not
Impacted by
Flooding
 Lake Charles,   $        $         $        $       $      $  
 Louisiana       1,475      2,355           12         -         -      3,842
 Kansas City,    2,989      1,073         2             -           -          4,064
 Missouri
 Boonville,      6,204      878           15            -           -          7,097
 Missouri
 Bettendorf,     2,559      2,121         6             -           -          4,686
 Iowa
 Marquette, Iowa 1,219      424           8             -           -          1,651
 Waterloo, Iowa  4,529      1,644         12            -           -          6,185
 Black Hawk,     4,460      3,023         11            -           -          7,494
 Colorado
 Pompano,        1,779      2,692         7             -           -          4,478
 Florida
                 25,214     14,210        73            -           -          39,497
Properties
Impacted by
Flooding
 Natchez,        1,114      374           8             -           -          1,496
 Mississippi
 Lula,           354        1,671         16            -           -          2,041
 Mississippi
 Vicksburg,      91         1,282         3             -           -          1,376
 Mississippi
 Caruthersville, 856        844           8             -           -          1,708
 Missouri
 Davenport, Iowa 1,741      558           8             -           -          2,307
                 4,156      4,729         43            -           -          8,928
Total Operating  29,370     18,939        116           -           -          48,425
Properties
 Corporate and   (9,597)    707           2,316         27          -          (6,547)
 Other
Total            $         $          $        $       $      $ 
                 19,773     19,646        2,432          27         -      41,878

Isle of Capri Casinos, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(unaudited, in thousands)
                 Six Months Ended October 28, 2012
                 Operating  Depreciation  Stock-Based                          Adjusted
                 Income     and           Compensation  Preopening  Financing  EBITDA
                 (Loss)     Amortization
Properties Not
Impacted by
Flooding
 Lake Charles,   $        $         $        $       $      $  
 Louisiana       5,230      4,422            6       -         -         9,658
 Kansas City,    6,267      2,019         6             -           -          8,292
 Missouri
 Boonville,      12,412     1,753         11            -           -          14,176
 Missouri
 Bettendorf,     7,108      3,483         9             -           -          10,600
 Iowa
 Marquette, Iowa 2,431      876           10            -           -          3,317
 Waterloo, Iowa  10,132     2,657         11            -           -          12,800
 Black Hawk,     10,843     4,358         24            -           -          15,225
 Colorado
 Pompano,        5,820      3,577         14            -           -          9,411
 Florida
                 60,243     23,145        91            -           -          83,479
Properties
Impacted by
Flooding
 Natchez,        961        827           10            -           -          1,798
 Mississippi
 Lula,           304        3,425         11            -           -          3,740
 Mississippi
 Vicksburg,      (265)      2,262         9             -           -          2,006
 Mississippi
 Caruthersville, 1,416      1,691         10            -           -          3,117
 Missouri
 Davenport, Iowa 3,167      1,074         11            -           -          4,252
                 5,583      9,279         51            -           -          14,913
Total Operating  65,826     32,424        142           -           -          98,392
Properties
 Corporate and   (23,487)   1,248         2,753         3,341       1,478      (14,667)
 Other
Total            $         $          $        $         $        $ 
                 42,339    33,672        2,895         3,341      1,478      83,725
                 Six Months Ended October 23, 2011
                 Operating  Depreciation  Stock-Based                          Adjusted
                 Income     and           Compensation  Preopening  Financing  EBITDA
                 (Loss)     Amortization
Properties Not
Impacted by
Flooding
 Lake Charles,   $        $         $        $       $      $ 
 Louisiana       5,934      4,664           31       -          -         10,629
 Kansas City,    6,179      2,012         7             -           -          8,198
 Missouri
 Boonville,      12,522     1,756         34            -           -          14,312
 Missouri
 Bettendorf,     5,533      4,150         11            -           -          9,694
 Iowa
 Marquette, Iowa 2,512      856           15            -           -          3,383
 Waterloo, Iowa  8,682      3,274         26            -           -          11,982
 Black Hawk,     8,093      6,029         20            -           -          14,142
 Colorado
 Pompano,        4,699      5,325         12            -           -          10,036
 Florida
                 54,154     28,066        156           -           -          82,376
Properties
Impacted by
Flooding
 Natchez,        1,308      734           16            -           -          2,058
 Mississippi
 Lula,           (234)      3,442         35            -           -          3,243
 Mississippi
 Vicksburg,      56         2,551         3             -           -          2,610
 Mississippi
 Caruthersville, 1,051      1,629         16            -           -          2,696
 Missouri
 Davenport, Iowa 3,433      1,122         16            -           -          4,571
                 5,614      9,478         86            -           -          15,178
Total Operating  59,768     37,544        242           -           -          97,554
Properties
 Corporate and   (22,302)   1,278         4,137         63          -          (16,824)
 Other
Total            $         $          $        $       $      $ 
                 37,466    38,822        4,379         63         -         80,730

Isle of Capri Casinos, Inc.
Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA
(unaudited, in thousands)
                           Three Months Ended         Six Months Ended
                           October 28,   October 23,  October 28,  October 23,
                           2012          2011         2012         2011
Income (loss) from         $         $        $       $    
continuing operations      (4,341)       (1,030)       403        (3,589)
   Income tax provision    (1,182)       (622)        136          (2,183)
   Derivative (income)     (176)         (260)        (310)        (29)
   expense
   Interest income         (131)         (192)        (306)        (435)
   Interest expense        21,985        21,877       42,416       43,702
   Depreciation and        16,850        19,646       33,672       38,822
   amortization
   Stock-based             1,577         2,432        2,895        4,379
   compensation
   Preopening              2,654         27           3,341        63
   Financing related       1,478         -            1,478        -
Adjusted EBITDA            $          $         $         $   
                           38,714       41,878      83,725      80,730

   Adjusted EBITDA is "earnings before interest and other non-operating income
   (expense), income taxes, stock-based compensation, preopening expense and
   depreciation and amortization." Adjusted EBITDA is presented solely as a
   supplemental disclosure because management believes that it is 1) a widely
   used measure of operating performance in the gaming industry, 2) used as a
   component of calculating required leverage and minimum interest coverage
   ratios under our Senior Credit Facility and 3) a principal basis of valuing
   gaming companies. Management uses Adjusted EBITDA as the primary measure of
   the Company's operating properties' performance, and they are important
   components in evaluating the performance of management and other operating
   personnel in the determination of certain components of employee
1. compensation. Adjusted EBITDA should not be construed as an alternative to
   operating income as an indicator of the Company's operating performance, as
   an alternative to cash flows from operating activities as a measure of
   liquidity or as an alternative to any other measure determined in
   accordance with U.S. generally accepted accounting principles (GAAP). The
   Company has significant uses of cash flows, including capital expenditures,
   interest payments, taxes and debt principal repayments, which are not
   reflected in Adjusted EBITDA. Also, other gaming companies that report
   Adjusted EBITDA information may calculate Adjusted EBITDA in a different
   manner than the Company. A reconciliation of Adjusted EBITDA to income
   (loss) from continuing operations is included in the financial schedules
   accompanying this release.
   Certain of our debt agreements use a similar calculation of "Adjusted
   EBITDA" as a financial measure for the calculation of financial debt
   covenants and includes add back of items such as gain on early
   extinguishment of debt, pre-opening expenses, certain write-offs and
   valuation expenses, and non-cash stock compensation expense. Reference can
   be made to the definition of Adjusted EBITDA in the applicable debt
   agreements on file as Exhibits to our filings with the Securities and
   Exchange Commission.

SOURCE Isle of Capri Casinos, Inc.

Website: http://www.islecorp.com
 
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