Twelve Month 2011 Results
Net losses for the twelve months ended January 1, 2012 were $1.8 million, compared to net losses of $13.8 million for the twelve months ended January 2, 2011. Losses from operations were $10.3 million for 2011 compared to losses of $40.8 million for 2010. Basic and diluted losses were $0.07 per share for the twelve months ended January 1, 2012 compared to losses of $0.52 per share for the twelve months ended January 2, 2011.
Lakes Entertainment reported revenues of $35.6 million for the twelve months ended January 1, 2012, compared to prior-year revenues of $24.6 million. The increase in revenues was primarily the result of the buy-out of the management agreement for the Four Winds Casino Resort during the second quarter of 2011. Pursuant to the buy-out agreement, the Pokagon Band of Potawatomi Indians paid to Lakes a buy-out fee of approximately $24.5 million.
During 2011, Lakes’ selling, general and administrative expenses were $9.5 million compared to $11.8 million during 2010. Selling, general and administrative expenses consisted primarily of payroll and related expenses, travel expenses and professional fees. This decline resulted primarily from decreases in payroll and related expenses and travel expenses during 2011 compared to 2010.
During the third quarter of 2011, Lakes entered into an agreement for the purpose of managing and redeveloping the existing Dania Jai Alai fronton in Dania Beach, Florida. The Company’s partner in this project had an agreement to purchase the Jai Alai fronton. Lakes made an initial investment of $4.0 million related to the project via a convertible promissory note. As a result of ongoing litigation, the Florida legislature introducing legislation to permit full casino resorts in southern Florida and the deterioration of the credit markets since entering into the agreement, the convertible note receivable was written down to zero during the third quarter of fiscal 2011. In addition, because of our partner’s inability to close the purchase transaction by November 28, 2011, the owner of the Dania Jai Alai fronton (a subsidiary of Boyd Gaming Corporation) issued a letter formally terminating the asset purchase agreement.