Nine Month ResultsNet earnings for the nine months ended September 30, 2012 were $1.2 million, compared to net earnings of $10.8 million for the nine months ended October 2, 2011. Loss from operations was $5.2 million for the first nine months of 2012 compared to earnings from operations of $6.5 million for the first nine months of 2011. Basic and diluted earnings were $0.05 per share for the nine months ended September 30, 2012 compared to earnings of $0.41 per share for the nine months ended October 2, 2011.
Lakes Entertainment reported revenues of $8.1 million for the nine months ended September 30, 2012, compared to revenues of $34.3 million in the prior year period. The decrease in revenues was primarily due to the buy-out of the management agreement for the Four Winds Casino Resort during June 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. The decrease was partially offset by an increase in fees earned from the management of the Red Hawk Casino during the first nine months of 2012 compared to the first nine months of 2011 as well as the addition of $1.7 million in revenues associated with the operation of Rocky Gap.
During the first nine months of 2012, property operating expenses for Rocky Gap which related primarily to rooms, food and beverage and golf were $0.8 million. Rocky Gap was acquired on August 3, 2012, therefore, there were no such expenses for the first nine months of 2011.
For the nine months ended September 30, 2012, Lakes’ selling, general and administrative expenses were $7.1 million compared to $7.5 million for the nine months ended October 2, 2011. This decline resulted primarily from decreases in travel and related expenses due to the termination of the Company’s aircraft lease during the fourth quarter of 2011, as well as decreases in corporate payroll and related expenses, which were partially offset by increases in professional fees and administrative costs associated with Rocky Gap.