Net revenues decreased by 6.3%
Three Months Ended
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July 26, July 27,
2009 2008
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Net revenues $259.9 $277.4
Income (loss) from continuing operations 0.8 (2.6)
Net income (loss) 0.9 (3.6)
Income (loss) per share from continuing operations 0.02 (0.09)
Net income (loss) per share 0.03 (0.12)
First Quarter Highlights
During the quarter, net revenues decreased by 6.3% to $259.9 million compared to the first quarter of FY 2009, primarily as a result of a $12.8 million decrease in gaming revenue. EBITDA from continuing operations for the first quarter of FY 2010 was $ 48.4 million, compared to $53.0 million for the first quarter of FY 2009. EBITDA from continuing operations for the first quarter of FY 2009 included a $6.0 million valuation charge relating to the termination of a potential development of a casino project. Property EBITDA decreased from $69.2 million in the prior year quarter to $58.2 million.
Virginia McDowell, the Company's president and chief operating officer, said, "First quarter results were generally in line with our expectations at most of our properties, with the decrease in company EBITDA primarily attributable to decreases in gaming revenue and EBITDA at the Company's properties in Biloxi and Lula MS, Lake Charles, LA and Bettendorf, IA. The Mississippi properties were impacted by continuing softness in their respective markets and an increase in unemployment rates, Bettendorf was negatively impacted by access issues caused by bridge repairs and the opening of a new gaming facility by one of our competitors in the Quad Cities, and Lake Charles was negatively impacted by changes in the promotional spend in the market.
"Despite the continued economic weakness, we have been successful in most of our markets maintaining our customer volumes while, consistent with other businesses dependent upon discretionary spending, our win per patron has decreased. We expect these visitation and spending behaviors to continue until there is a significant increase in consumer confidence.
"While unemployment has risen in a large number of our markets, we believe we have made operational progress through our focus on creating value for customers through our slot programs, courtesy initiatives and amenity pricing. It is, however evident that our year-over-year revenue and margin comparisons are difficult because government stimulus checks during the same period of the last fiscal year clearly had a positive impact on consumer spending.
"We were among the first gaming companies to implement aggressive cost savings initiatives, which led us to a savings in operating costs of almost $30 million during our last fiscal year ended April 26, 2009. While implementing these savings, we were successful in creating a more valued entertainment experience for our patrons and improving our customer service metrics across the portfolio. Moving forward, our plan is to continue to identify targeted opportunities to reduce costs and drive incremental revenue, to continue to strengthen our relationships with profitable customers, and to avoid measures that would negatively impact our performance in the long-term.
"We are holding firm in our resolve to defer the great majority of our planned renovation and project capital expenditures until we achieve more visibility into an economic turnaround. However, we are continuing to evaluate the competitive landscape in Colorado to capitalize on the opportunity presented by recent regulatory changes in that market, and we are also looking forward to the substantial completion of our Lady Luck conversion projects by the end of this month at our properties in Caruthersville and Marquette."
Corporate and Other Expenses
Corporate and other expenses decreased to $9.9 million for the three months ended July 26, 2009, from $10.3 million for the three months ended July 27, 2008. Corporate costs include cash expenses of $2.2 million related to payments made under our long-term incentive plan as a result of awarding long-term incentive awards in the first quarter of fiscal 2010. Our prior year long-term incentive awards were made during the second quarter of fiscal 2008. Non-cash stock compensation expense decreased $1.0 million in the three months ended July 26, 2009 to $1.1 million from $2.1 million for the three months ended July 27, 2008.
Interest expense for the quarter was $18.3 million, a decline of approximately $5.5 million compared to the prior fiscal year, primarily as a result of lower debt levels.
Capital Structure and Capital Expenditures
As of July 26, 2009, the Company had $104.8 million in cash and cash equivalents and total debt of $1.3 billion. Capital expenditures for the three months ended July 26, 2009 totaled $4.4 million, which included approximately $2.7 million of maintenance capital expenditures. We expect maintenance capital expenditures for the rest of the year to be approximately $35 million.
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