Lakes Entertainment, Inc. (NASDAQ: LACO) today announced results for the three months and six months ended July 3, 2011.
Second Quarter Results
Net earnings for the second quarter of 2011 were $9.5 million, compared to $3.9 million in the second quarter of 2010. Earnings from operations were $15.8 million for the second quarter of 2011 compared to a loss from operations of $3.5 million for the second quarter of 2010. Basic and diluted earnings were $0.36 per share for the second quarter of 2011 compared to $0.15 per share for the second quarter of 2010.
Lakes Entertainment reported second quarter 2011 revenues of $28.2 million, compared to prior-year second quarter revenues of $4.8 million. During the second quarter of 2011, the Pokagon Band of Potawatomi Indians (“Pokagon Band”) exercised its right to buy out the remaining term of the Third Amended and Restated Management Agreement (“Management Agreement”) between the Pokagon Band and Lakes for the management of the Four Winds Casino Resort, which was scheduled to expire on August 1, 2012. Pursuant to the Buy-Out and Termination Agreement (“Buy-Out Agreement”), on June 30, 2011, the Pokagon Band paid to Lakes a buy-out fee of approximately $24.5 million. The Buy-Out Agreement terminated the Management Agreement resulting in Lakes having no further obligations or responsibilities with respect to the Four Winds Casino Resort. The Buy-Out Agreement was the primary reason for the increase in revenues and net earnings during the second quarter of 2011 compared to the second quarter of 2010.
For the second quarter of 2011, Lakes’ selling, general and administrative expenses decreased in comparison to the second quarter of 2010 by approximately $1.0 million to $2.3 million. Selling, general and administrative expenses consisted primarily of payroll and related expenses, travel expenses and professional fees, all of which decreased compared to the prior year period.