Isle of Capri Casinos announced widening Y/Y losses today, along with the retirement of CEO Bernard Goldstein after 16 years at the helm. He gives way to board member James Perry, former CEO of Argosy Gaming and (briefly) Trump Entertainment. Along with COO Virginia McDowell, Perry presided over Argosy’s glory years, ones in which it emerged as the Rolls-Royce of riverboat-casino companies, eventually making it a takeover target for Penn National Gaming.
Perry faces a daunting task at Isle, whose stock is trading at a seven-year low. According to Isle, Perry has a turnaround plan in place, whose components include reintroducing the Lady Luck brand (to connote second-tier markets), upgrading amenities — not currently regarded as one of Isle’s strengths — and a downsizing at the corporate level.
However, in a possible allusion to the scorched-earth business methods of competitor Columbia Sussex, McDowell says, “We recognize, however, that companies cannot save their way to success and we continue to reallocate our resources in order to improve the overall guest experience,” etc.
Isle’s net revenues were up, but largely on the strength of newly opened or acquired properties (like its Waterloo, Iowa casino, above). One of those is the Casino Aztar boat in Caruthersville, Missouri, which the state wouldn’t let Columbia Sussex acquire in the Aztar Corp. buyout.
Back out the new properties and the balance sheet looks a whole lot worse, with revenue -11% instead of +17%.
Louisiana and Mississippi revenues are down, as casino competition returns to pre-Katrina/Rita levels. In Iowa, Isle is experiencing the same malaise as nearly everyone else — a plight that’s bound to worsen if the state approves as many five new casinos. Nearly $5 million went down the tubes in a futile tilt at the Pittsburgh market and a foolish run at Singapore.
Trump Entertainment Resorts was also feeling the pain today, as losses grew a jaw-dropping nineteen-fold (yes, 19X) on a 6.4% slip in revenue, coming in 2% below analyst expectations. The loss was swollen by a $147.4 million in “intangibles,” plus a $91.3 million write-off on the declining value of Trump Marina. “There’s no question Atlantic City is a difficult environment to operate in, and some properties had a difficult fourth quarter,” remarked Bear Stearns analyst Carlo Santarelli, displaying a genius for understatement.
[…] apt handle for this casino, which was the last stand of the Bernie Goldstein administration before going into exile. Its opening drew attention to the fact that Isle was growing revenues at the time by adding […]