Lakes Entertainment, Inc. (NASDAQ: LACO) today announced results for the three months ended April 3, 2011.
Net earnings for the first quarter of 2011 were $1.4 million, compared to a net loss of $4.7 million in the first quarter of 2010. Earnings from operations were $1.2 million for the first quarter of 2011 compared to a loss from operations of less than $0.1 million for the first quarter of 2010. Basic and diluted earnings were $0.05 per share for the first quarter of 2011 compared to basic and diluted losses of $0.18 per share for the first quarter of 2010.
Lakes Entertainment reported first quarter 2011 revenues of $5.9 million, compared to prior-year first quarter revenues of $7.0 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 in Shingle Springs, California. The decline was partially offset by an increase in management fees earned from the Four Winds Casino Resort, in New Buffalo Michigan, during the first quarter of 2011 compared to the prior-year period.
For the first quarter of 2011, Lakes’ selling, general and administrative expenses decreased in comparison to the first quarter of 2010 by approximately $0.6 million to $2.7 million. Selling, general and administrative expenses consisted primarily of payroll and related expenses, travel expenses and professional fees. The decline in selling, general and administrative costs in the first quarter of 2011 compared to the first quarter of 2010 resulted primarily from decreases in payroll and related expenses and travel expenses.
Lakes recognized impairment losses of $0.9 million during the first quarter of 2011 compared to $2.7 million in the prior-year period. Impairment losses in the first quarters of 2011 and 2010 included approximately $0.9 million and $0.6 million, respectively, due to continued uncertainty surrounding the completion of the project with the Jamul Indian Village (“Jamul Tribe”) near San Diego, California. Also included in impairment losses for the first quarter of 2010 were $2.1 million related to the previously announced termination agreement entered into with the Iowa Tribe of Oklahoma in May 2010 related to the Ioway Casino project.