Lakes Entertainment, Inc. Announces Results for Third Quarter 2007.MINNEAPOLIS -- Lakes Entertainment, Inc. (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : LACO) announced its results for the third quarter ended September 30, 2007. Revenue for the quarter totaled $7.0 million compared to $5.9 million for the third quarter ended October 1, 2006. Losses from operations were $6.3 million for the current-year quarter compared to earnings from operations of $1.0 million for the prior year comparable period. Net losses for the third quarter of 2007 were $5.2 million, and basic and diluted losses were $0.21 per share. This compares with net earnings of $3.0 million, and basic and diluted earnings of $0.13 per share and $0.12 per share, respectively, in the third quarter of 2006.
Revenues for the third quarter of 2007 include management fees from the existing Cimarron Casino in Oklahoma which is owned by the Iowa Tribe The Iowa (also spelled Ioway), also known as the Baxoje, are a Native American people. Together with the Missouri, the Omaha, the Oto and the Ponca they are part of the Chiwere-speaking peoples, claiming the Ho-Chunks as their "grandfathers. of Oklahoma and management fees for approximately eight weeks of operations from the Four Winds Casino Resort (Four Winds) in New Buffalo, Michigan New Buffalo is a city in Berrien County in the U.S. state of Michigan. The population was 2,200 at the 2000 census. Geography
According to the United States Census Bureau, the city has a total area of 6.4 km² (2.5 mi²). 6.3 km² (2.4 mi²) of it is land and 0.1 km² (0. , which is owned by the Pokagon Band of Potawatomi Indians Pokagon Band of Potawatomi Indians are Algonquian-speaking Potawatomi-people located in southwestern Michigan and northeastern Indiana. Tribal government functions are located in Dowagiac, Michigan. The tribal membership has grown to approximately 3,150 members as of 2006. (Pokagon Band), and opened to the public on August 2, 2007. In accordance with the management contract with the Pokagon Band, pre-opening expenses totaling approximately $15 million incurred during the construction phase of the project are shared proportionately by Lakes during the first twelve months of Four Winds' operations. The combined management fees, which are net of Lakes' share of these pre-opening expenses, were $2.6 million for the third quarter of 2007. No management fees were recognized during the third quarter of 2006.
Revenues for the third quarter of 2006 were derived primarily from television license fees related to the World Poker Tour For the PBS network with the same abbreviation, see .
The World Poker Tour (Abbreviated WPT) is a series of international poker tournaments featuring most of the world's professional players. (WPT WPT World Poker Tour
WPT Wisconsin Public Television
WPT Watson Poker Tour
WPT Wonderlic Personnel Test
WPT Wavelet Packet Transform
WPT Wireless Power Transmission
WPT Windfall Profit
WPT Wireless Personal Terminal
WPT Word Processing Technician ) television series of Lakes' majority-owned subsidiary majority-owned subsidiary
A firm in which more than 50% of outstanding voting stock is owned by the parent company. , WPT Enterprises, Inc. (WPTE WPTE Western Pacific Tracking Element ). Revenue from this license fee income decreased during the third quarter of 2007 compared to the third quarter of 2006 as a result of the delivery of no episodes of the Professional Poker Tour This article or section contains information about the future of a television show which is currently on a seasonal break or has not yet finished its broadcast run. (PPT) television series in the 2007 period, versus the delivery of nine episodes of the PPT in the third quarter of 2006, and the delivery of three episodes of season five of the WPT television series in the third quarter of 2007, versus the delivery of one episode of season five of the WPT in the 2006 period.
Net unrealized gains Unrealized Gain
A profit that results from holding on to an asset rather than cashing it in and using the funds.
Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. and (losses) on notes receivable were ($0.6) million and $5.8 million for the third quarters of 2007 and 2006, respectively. The net unrealized losses Unrealized Loss
A loss that results from holding onto an asset rather than cashing it in and officially taking the loss.
Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. in the third quarter of 2007 related to unrealized gains on Lakes' notes receivable from the Shingle shingle
Thin piece of building material made of wood, asphaltic material, slate, metal, or concrete, laid in overlapping rows to shed water. Shingles are widely used as roof covering on residential buildings and sometimes also for siding (see Shingle style). Springs Band of Miwok Indians (Shingle Springs Tribe) in the amount of $1.2 million and unrealized losses of $1.8 million on the Lakes' notes receivable from the Jamul Indian Village (Jamul Tribe). These notes receivable are adjusted to estimated fair value based upon the current status of the related tribal casino projects. The increase in fair value of the notes receivable from the Shingle Springs Tribe relates primarily to continued progress on the construction of this project, which is currently within budget and on schedule. The decrease in fair value of the notes receivable from the Jamul Tribe relates primarily to an increase in the discount rate which resulted from a decrease in current estimated win per unit for this project.
Net unrealized gains of $5.8 million during the third quarter of 2006 included $2.6 million related to the adjustment to fair value of notes receivable from the Shingle Springs Tribe due to favorable events occurring during the third quarter of 2006. The remainder of the net unrealized gains during the three months ended October 1, 2006, related primarily to increases in fair value of notes receivable from the Jamul Tribe and the Pokagon Band.
Selling, general and administrative expenses were $10.1 million during the third quarter of 2007 compared to $8.8 million in the third quarter of 2006. The increase primarily related to additional costs associated with WPTE's online gaming See gaming. efforts as well as increased costs associated with WPTE's launch of the WPT China National Traktor[TM] Poker Tour.
Included in costs and expenses for the third quarter of 2007 is amortization of intangible assets Intangible Asset
An asset that is not physical in nature.
Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of approximately $1.1 million associated with the casino project with the Pokagon Band. This amortization began when the Four Winds Casino Resort opened on August 2, 2007, as discussed above.
Other income for the third quarter of 2007 was $0.7 million compared to other income of $5.3 million for the same period of 2006. Other income in the third quarter of 2006 included a $4.5 million realized gain Realized Gain
A gain resulting from selling an asset at a price higher than the original purchase price.
There may be tax consequences for a realized profit. on the sale of WPTE's remaining 450,000 shares of PokerTek, Inc. (PokerTek) common stock.
The decrease in the income tax provision of $1.7 million for the three months ended September 30, 2007, compared to the three months ended October 1, 2006, was due primarily to the realized gain on WPTE's sale of PokerTek common stock which increased the provision during the third quarter of 2006.
Chief Executive Officer Lyle Berman Lyle Berman (born August 6, 1941 in Minneapolis, Minnesota) is a professional poker player and business executive. Business
Berman grew up in Minnesota and attended the University of Minnesota where he graduated in 1964 with a degree in business administration. stated, "The opening of the Four Winds Casino Resort in Michigan was a significant milestone for Lakes, and we are now focused on the successful management of this property. Initial casino win was somewhat disappointing. However, Four Winds' results, and our related management fees have continued to improve as a result of modifications which were made in a number of areas to meet customer demands and to improve operating efficiencies. We have continued to be very pleased with guest count numbers since Four Winds' opening, and as a result, key performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees . continue to improve. We believe this property is in a class by itself in its market, and we look forward to its future performance."
President and Chief Financial Officer Tim Cope stated, "Construction continues on the Foothill Oaks Casino project with the Shingle Springs Tribe near Sacramento, California “Sacramento” redirects here. For other uses, see Sacramento (disambiguation).
Sacramento is the capital of the State of California and the county seat of Sacramento County. , and the project is currently on schedule and within budget. We continue to expect, and are looking forward to, an opening date late in the fourth quarter of 2008."
Lakes Entertainment invites you to join its third-quarter 2007 conference call today at 1:00 p.m. Central time. Hosting the call will be Lyle Berman, chairman of the board and chief executive officer, and Tim Cope, president and chief financial officer. To participate in the call, please dial 866-862-3928 at least five minutes prior to the start time and ask for the Lakes Entertainment third-quarter 2007 conference call, or on the Internet, go to Lakes' Web site, www.lakesentertainment.com, and click on "Conference Call". If you are unavailable to participate on the live call, a replay will be available through November 14, 2007, at 11:59 p.m. central time. To access the replay, dial 800-408-3053, enter conference ID 3240947, and follow the prompts. The replay will also be available on Lakes' Web site for 30 days.
About Lakes Entertainment
Lakes Entertainment, Inc. currently has development and management agreements with five separate Tribes for casino operations in Michigan, California, and Oklahoma, for a total of eight separate casino sites. In addition, Lakes has announced plans to develop a company owned casino resort project in Vicksburg, Mississippi Vicksburg is a city in Warren County, Mississippi. It is located 234 miles (377 km) north by west of New Orleans on the Mississippi and Yazoo rivers, and 40 miles (65 km) due west of Jackson, the state capital. . The company also owns approximately 61 percent of WPT Enterprises, Inc. (NASDAQ: WPTE), a separate publicly held media and entertainment company principally engaged in the development, production and marketing of gaming themed televised programming including the World Poker Tour([R]) television series, the operation of an online gaming website, the licensing and sale of branded consumer products and the sale of corporate sponsorships.
The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc plans for future expansion and other business development activities as well as other capital spending capital spending
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, need for current financing to meet Lakes' operational and development needs; those relating to the inability to complete or possible delays in completion of Lakes' casino projects, including various regulatory approvals and numerous other conditions which must be satisfied before completion of these projects; possible termination or adverse modification of management or development contracts; Lakes operates in a highly competitive industry; possible changes in regulations; reliance on continued positive relationships with Indian tribes and repayment of amounts owed to Lakes by Indian tribes; continued contracts with the Pawnee Nation as a result of the change in its business council membership; possible need for future financing to meet Lakes' expansion goals; risks of entry into new businesses; reliance on Lakes' management; and the fact that the WPTE shares held by Lakes are currently not liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. , and there is no assurance that Lakes will be able to realize value from these holdings equal to the current or future market value of WPTE common stock. There are also risks and uncertainties relating to WPTE that may have a material effect on the company's consolidated results of operations or the market value of the WPTE shares held by the company, including WPTE's significant dependence on the Travel Channel as a current source of revenue and GSN GSN Game Show Network
GSN GCOS Surface Network
GSN Global Seismic Network
GSN Government Security News
GSN Gigabyte System Network (CERN)
GSN GPRS Support Node (3GPP) as a future source of revenue, and the risk that GSN will not exercise its options to air seasons of the WPT series beyond Season Six; difficulty of predicting the growth of WPTE's online gaming business, which is a relatively new industry with an increasing number of market entrants; reliance on the efforts of CryptoLogic cryp·tol·o·gy
The study of cryptanalysis or cryptography.
crypto·log to develop and maintain the online gaming website in compliance with WPTE's business model and applicable gaming laws; the potential that WPTE's television programming will fail to maintain a sufficient audience; the risk that WPTE may not be able to protect its entertainment concepts, current and future brands and other intellectual property rights; the risk that competitors with greater financial resources or marketplace presence might develop television programming that would directly compete with WPTE's television programming; risks associated with future expansion into new or complementary businesses; the termination or impairment of WPTE's relationships with key licensing and strategic partners; and WPTE's dependence on its senior management team. For more information, review the company's filings with the Securities and Exchange Commission.
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