QUOTE AND NEWS
Benzinga  Dec 2  Comment 
Isle Of Capri Casinos (NASDAQ: ISLE) reported its third quarter earnings on Tuesday. Shares of the company are up 4.7 percent. Below are some key highlights from its conference call. Growth and Performance Prospects: • Net revenues were...
TheStreet.com  Dec 1  Comment 
DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the...
SeekingAlpha  Aug 27  Comment 
By SA Transcripts: Isle of Capri Casinos, Inc. (NASDAQ:ISLE) Q1 2015 Earnings Conference Call August 27, 2014 11:00 AM ET Executives Jill Alexander – Senior Director-Corporate Communication Virginia McDowell – President and...
TheStreet.com  Aug 27  Comment 
NEW YORK (TheStreet) -- Shares of Isle of Capri Casinos are higher by 4.54% to $7.83 in mid-morning trading on Wednesday, after the gaming company reported a narrowed net loss for the fiscal 2015 first quarter to -$2.3 million, or -6 cents per...
DailyFinance  Aug 26  Comment 
G.I. JOE Writer and BUCKY O'HARE Creator to Pen New Red Giant SeriesORLANDO, FL -- (Marketwired) -- 08/26/14 -- Red Giant Entertainment Inc. (OTC: REDG), an innovative Intellectual Property company specializing in high quality characters and...
Market Intelligence Center  Jul 14  Comment 
Last week, share price of Isle of Capri Casinos, Inc. (ISLE) plunged after the company announced a few changes in management. Further, Pinnacle Entertainment Inc. (PNK) provided an estimate for its consolidated adjusted EBITDA and income from...
Motley Fool  Jul 12  Comment 
Is this meaningful? Or just another movement?
Motley Fool  Jul 11  Comment 
Even though stocks eked out modest gains, these three stocks didn't manage to climb back to even. Find out why.
Benzinga  Jul 11  Comment 
Kofax (NASDAQ: KFX) shares declined 13.30% to $7.01 after the company reported selected preliminary unaudited results for FY14. Kofax expected FY14 sales of $295.0 million to $298.0 million. Isle of Capri Casinos (NASDAQ: ISLE) shares dipped...




 

Isle of Capri Casinos (NASDAQ: ISLE) owns casinos catering to a middle-class clientèle. Its 14 casinos are located in Missouri, Mississippi, Louisiana, Florida, Colorado, and Iowa. The company's casinos feature over 14,500 slot machines and over 350 table games (including approximately 95 poker tables) over 3,000 hotel rooms and more than three dozen restaurants. The company also operates a harness racing track at its casino in Florida.[1] The company earned $1 billion in revenue but incurred a net loss of $3 million in 2009.[2]

As a luxury entertainment provider, Isle is especially vulnerable to fluctuations in the US economy. During sluggish economic times, consumers are spending less money, especially on luxury items and activities. As a result, fewer people visit casinos and Isle's revenue suffers. In 2009, the company's net revenue fell by 10% due to fewer people visiting their casinos.[2]

Company Overview

Business Segments[3]

Isle of Capri owns 14 casinos in the United States. The majority of Isle's revenue (85%) comes from its casino operations, with the rest of its revenue coming from its hotel earnings (11% food and beverage, 4% rooms).

  • Casino (85% of Revenue) - Casino revenues, which consist of net winnings from gaming at Isle's casinos, are approximately $1 billion.
  • Pari-Mutuel, Food, Beverage, and Other (11% of Revenue) - This segment consists of food, beverage, and other miscellaneous services Isle provides to its customers that do not fall in the casino or rooms segments. These include services such as room service fees, vending machine revenues, and in-room telephone services. This segment also consists of commissions and fees earned at Pompano Park, Isle of Capri's only property that has pari-mutuel betting (a horse track)
  • Rooms (4% of Revenue) - This segment consists of revenue obtained from the renting out of guest rooms at Isle's hotel properties.

Business Growth

FY 2009 (ended April 25, 2010)[2]

  • Net revenue fell 10% to $1 billion due to 4% lower casino revenues as fewer people visited the casinos due to the sluggish economy.
  • The company incurred a net loss of $3 million compared to a net gain of $44 million in the previous year.

Trends and Forces

Economic cycles that decrease disposable income hurt the gambling industry

People tend to participate in luxury activities such as gambling only when they feel they have enough disposable income. In a sluggish economy with high unemployment and high Oil prices, consumers are less like to spend money, especially on luxury activities. The slow economic environment caused by the Subprime lending crisis and fall of the U.S. Housing Market has caused consumer confidence to fall. This trend iss harmful to Isle's business, as its casino revenue depends on consumer spending. As a result of the sluggish economy, the company's casino revenue fell by 4% in 2009.[2]

A declining airline industry is negatively affecting business from out-of-market tourists

Casino/resort operators such as Isle of Capri depend heavily on overall economic strength for its revenue, as people tend to travel only when they feel they have enough disposable income to afford such vacations. As a result of these increasing fuel costs, ticket prices have increased over the years. Pricier flights could lead consumers to not fly at all, meaning that fewer people would visit Isle's casinos. Additionally, more expensive plane tickets mean that customers will cut back spending in other areas, like food/drink and even hotel costs. Isle stands to lose revenue as people cut back on spending. In 2009, room revenues decreased by 7.3% due to fewer decreased occupancy.[2]

Changing gambling regulations in Colorado hurt Isle's business

In January 2008, the Colorado state government enacted a new law prohibiting smoking in state casinos. This new piece of regulation had disastrous effects on the business of state casinos. Because Isle of Capri obtains almost 13% of its revenue from its operations in the state of Colorado, it is heavily affected by this trend.[4]

Isle is affected by the harsh weather conditions in the markets in which it operates

Several of Isle of Capri's properties are located in regions that are prone to inclement weather, including dockside and houseboat properties.[5] Its Biloxi and Lake Charles properties were both shut down in September and October of 2005 as a result of Hurricanes Katrina and Rita.

Competition

Isle of Capri caters primarily to middle-class customers, as opposed to companies like MGM MIRAGE (MGM) that aim to attract high-end tourists in popular vacation hotspots like Las Vegas. As such, Isle primarily competes with casino/resort companies that operate in the same markets as it does. These companies include:

  • Ameristar Casinos (ASCA) runs eight casino resorts in the Midwestern United States. Ameristar depends on local residents for the majority of its revenue, differentiating it from most other casino operators. Ameristar competes with Isle's properties in Colorado, Missouri, Iowa, and Mississippi.
  • Penn National Gaming (PENN) owns casinos, racetracks, and other betting facilities in 14 states and Canada. Penn Gaming competes with Isle of Capri Casinos in five of the six states in which it operates: Colorado, Florida, Iowa, Missouri, and Mississippi.
  • Pinnacle Entertainment (PNK) develops, owns, and operates casino gaming resorts around the world. In addition to its six main casinos in Nevada, Louisiana, Indiana, and Missouri, Pinnacle operates several small casinos in Argentina. Pinnacle thus directly competes with Isle in the Louisiana and Missouri markets.
  • Boyd Gaming (BYD) owns and operates 16 casinos in the United States. Boyd, which targets middle-income customers, competes with Isle of Capri in Mississippi, Louisiana, and Florida.

References

  1. ISLE 2009 10-K "Overview" pg. 1
  2. 2.0 2.1 2.2 2.3 2.4 ISLE 2009 10-K "Selected Financial Data" pg. 25
  3. ISLE 2009 10-K "pg. 30
  4. ISLE 2009 10-K pg. 13
  5. ISLE 2009 10-K pg. 17
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