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Lakes Entertainment Announces Results For Second Quarter 2012

About Lakes Entertainment

Lakes Entertainment, Inc. currently has a management agreement with the Shingle Springs Band of Miwok Indians to manage the Red Hawk Casino. Lakes has an investment in Rock Ohio Ventures, LLC’s casino developments in Cincinnati and Cleveland, Ohio. Lakes’ subsidiary Evitts Resort, LLC, has been awarded a video lottery operation license for the Rocky Gap Lodge & Golf Resort it owns near Cumberland, Maryland.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, need for potential future financing to meet Lakes’ development needs; those relating to the inability to complete or possible delays in completion of Lakes' casino projects, including various regulatory approvals and numerous other conditions which must be satisfied before completion of these projects; possible termination or adverse modification of management or development contracts; Lakes operates in a highly competitive industry; possible changes in regulations; reliance on continued positive relationships with Indian tribes and repayment of amounts owed to Lakes by Indian tribes; possible need for future financing to meet Lakes' expansion goals; risks of entry into new businesses; reliance on Lakes' management and litigation costs. For more information, review the company's filings with the Securities and Exchange Commission.
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
     
 
(Unaudited)
      July 1, 2012   January 1, 2012
Assets
Current assets:
Cash and cash equivalents $ 35,211 $ 38,557
Accounts receivable 24 117
Current portion of notes receivable from Indian casino projects - 1,076
Deposits 2,100 2,250
Income taxes receivable 5,487 3,472
  Other     1,169     1,013
Total current assets     43,991     46,485
Property and equipment, net     5,012     5,063
Long-term assets related to Indian casino projects:
Notes and interest receivable, net of current portion and allowance 36,052 34,160
Intangible assets 3,656 4,184
  Management fees receivable and other     5,509     8,275
Total long-term assets related to Indian casino projects     45,217     46,619
Other assets:
Investment in unconsolidated investee 20,161 15,706
Land held for development 1,130 170
Land held for sale 1,729 1,729
  Other     201     228
Total other assets     23,221     17,833
Total assets   $ 117,441   $ 116,000
 
Liabilities and shareholders' equity
Current liabilities:
Current portion of contract acquisition costs payable, net $ 1,155 $ 1,055
  Other     1,310     1,288
Total current liabilities 2,465 2,343
Long-term contract acquisition costs payable, net     3,964     4,568
Total liabilities     6,429     6,911
Total Lakes Entertainment shareholders' equity 111,012 108,739
  Noncontrolling interest     -     350
Total equity     111,012     109,089
Total liabilities and shareholders' equity   $ 117,441   $ 116,000
 
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements Earnings
(In thousands, except per share data)
           
 
Three months ended Six months ended
July 1, 2012   July 3, 2011 July 1, 2012   July 3, 2011
Revenues:
Management fees $ 2,503 $ 28,085 $ 4,446 $ 33,920
  License fees and other     16       72     36       130  
    Total revenues     2,519       28,157     4,482       34,050  
 
Costs and expenses:
Selling, general and administrative 1,905 2,286 4,208 4,942
Impairments and other losses 1,399 635 2,328 1,509
Amortization of intangible assets related to operating casinos 264 9,217 528 11,160
  Depreciation     52       55     106       112  
    Total costs and expenses     3,620       12,193     7,170       17,723  
 
Net unrealized gains (losses) on notes receivable     -       (124 )   -       618  
 
Earnings (loss) from operations     (1,101 )     15,840     (2,688 )     16,945  
 
Other income (expense):
Interest income 1,578 1,513 3,161 2,981
Interest expense (242 ) (321 ) (494 ) (642 )
  Other     44       120     58       240  
    Total other income, net     1,380       1,312     2,725       2,579  
 
Earnings (loss) before income taxes 279 17,152 37 19,524
  Income taxes (benefit)     (145 )     7,667     (2,142 )     8,659  
Net earnings including noncontrolling interest 424 9,485 2,179 10,865
  Net loss attributable to noncontrolling interest     1       -     61       -  
 
Net earnings attributable to Lakes Entertainment, Inc.   $ 425     $ 9,485   $ 2,240     $ 10,865  
 
Weighted-average common shares outstanding
Basic 26,441 26,406 26,436 26,404
  Diluted     26,441       26,431     26,436       26,429  
Gain (loss) per share
Basic $ 0.02 $ 0.36 $ 0.08 $ 0.41
Diluted $ 0.02 $ 0.36 $ 0.08 $ 0.41

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