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Lakes Entertainment Announces Results For Third Quarter 2012

About Lakes Entertainment

Lakes Entertainment, Inc. currently owns the Rocky Gap Lodge & Golf Resort near Cumberland, Maryland. Lakes 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 Ohio.

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)    
      September 30, 2012     January 1, 2012
Assets
Current assets:
Cash and cash equivalents $ 28,793 $ 38,557
Current portion of notes receivable from Indian casino projects - 1,076
Deposits - 2,250
Income taxes receivable 5,466 3,472
Other       1,851       1,130
Total current assets       36,110       46,485
Property and equipment, net       11,616       5,063
Long-term assets related to Indian casino projects:
Notes and interest receivable, net of current portion and allowance 37,103 34,160
Intangible assets 3,391 4,184
Management fees receivable and other       4,764       8,275
Total long-term assets related to Indian casino projects       45,258       46,619
Other assets:
Investment in unconsolidated investee 20,161 15,706
License fee 2,100 -
Land held for development 1,130 170
Land held for sale 405 1,729
Other       756       228
Total other assets       24,552       17,833
Total assets     $ 117,536     $ 116,000
 
Liabilities and shareholders' equity
Current liabilities:
Current portion of contract acquisition costs payable, net $ 1,209 $ 1,055
Other       2,572       1,288
Total current liabilities 3,781 2,343
Long-term contract acquisition costs payable, net       3,640       4,568
Total liabilities       7,421       6,911
Total Lakes Entertainment shareholders' equity 110,115 108,739
Noncontrolling interest       -       350
Total equity       110,115       109,089
Total liabilities and shareholders' equity     $ 117,536     $ 116,000
 
 
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
               
 
Three months ended Nine months ended
September 30, 2012     October 2, 2011 September 30, 2012     October 2, 2011
Revenues:
Management fees $ 1,885 $ 222 $ 6,331 $ 34,142
Room 763 - 763 -
Food and beverage 618 - 618 -
Other operating 358 - 358 -
License fees and other       15         28     51         158  
Total revenues       3,639         250     8,121         34,300  
 
Costs and expenses:
Room 146 - 146 -
Food and beverage 471 - 471 -
Other operating 216 - 216 -
Selling, general and administrative 2,846 2,537 7,054 7,479
Loss on convertible note receivable - 4,000 - 4,000
Impairments and other losses 1,986 1,102 4,314 2,611
Amortization of intangible assets related to operating casinos 264 264 792 11,424
Depreciation and amortization       229         128     335         240  
Total costs and expenses       6,158         8,031     13,328         25,754  
 
Net unrealized losses on notes receivable       -         (2,709 )   -         (2,091 )
 
Earnings (loss) from operations       (2,519 )       (10,490 )   (5,207 )       6,455  
 
Other income (expense):
Interest income 1,614 1,439 4,775 4,420
Interest expense (228 ) (273 ) (722 ) (915 )
Other       55         119     113         359  
Total other income, net       1,441         1,285     4,166         3,864  
 
Earnings (loss) before income taxes (1,078 ) (9,205 ) (1,041 ) 10,319
Income tax benefit       (87 )       (9,149 )   (2,229 )       (490 )
Net earnings (loss) including noncontrolling interest (991 ) (56 ) 1,188 10,809
Net loss attributable to noncontrolling interest       -         18     61         18  
 
Net earnings (loss) attributable to Lakes Entertainment, Inc.     $ (991 )     $ (38 ) $ 1,249       $ 10,827  
 
Weighted-average common shares outstanding
Basic 26,441 26,406 26,438 26,402
Diluted       26,441         26,406     26,438         26,427  
Earnings (loss) per share
Basic $ (0.04 ) $ (0.00 ) $ 0.05 $ 0.41
Diluted $ (0.04 ) $ (0.00 ) $ 0.05 $ 0.41
 

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