Lakes Entertainment, Inc. (NASDAQ:LACO) today announced results for the three months and twelve months ended January 2, 2011.
Fourth Quarter Results
Net losses for the fourth quarter of 2010 were $28.1 million, compared to $2.4 million in the fourth quarter of 2009. Losses from operations were $39.5 million for the fourth quarter of 2010, compared to $3.2 million for the fourth quarter of 2009. Basic and diluted losses were $1.07 per share for the fourth quarter of 2010 compared to $0.09 per share for the fourth quarter of 2009.
Lakes Entertainment reported fourth quarter 2010 revenues of $4.7 million, compared to 2009 fourth quarter revenues of $5.3 million. This decline was due to the elimination of management fees from the Cimarron Casino project, as a result of the termination of that agreement in May 2010, as well as a decline in management fees associated with the Red Hawk Casino project compared to the fourth quarter of 2009. The decline was partially offset by an increase in management fees earned from the Four Winds Casino Resort during the fourth quarter of 2010 compared to the prior-year period.For the fourth quarter of 2010, Lakes’ selling, general and administrative expenses were $2.3 million compared to $2.9 million in the fourth quarter of 2009. Selling, general and administrative expenses consisted primarily of payroll and related expenses, travel expenses and professional fees. Decreases in each of these categories resulted in the $0.6 million decline in selling, general and administrative expenses during the fourth quarter of 2010, compared to the fourth quarter of 2009. Lakes concluded that the notes receivable from the Shingle Springs Tribal Gaming Authority were impaired as of January 2, 2011, resulting in an impairment charge on notes receivable of $21.0 million during the fourth quarter of 2010. Lakes does not currently estimate that these amounts will be repaid within the contract terms due to the continued harsh economic climate in northern California and increased competition from a neighboring casino expansion in the Red Hawk market which have negatively impacted cash flows for the property. There were no impairment charges on notes receivable during the fourth quarter of 2009.
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