• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

In preparation for ISLE's FY3Q11 earnings release Monday, we’ve put together the pertinent forward looking commentary from ISLE’s FY2Q11 earnings call.


  • Our improved performance was fueled by our continuing efforts to improve flow through by focusing on profit enhancement programs, including continuing cost containment efforts and refining our marketing programs.”
  • “We are cautiously optimistic that the economy is beginning to recover, but slowly.”
  • We expect maintenance capital for the rest of the year to be about $22 million. And we expect to probably expend about $10 million towards the Cape Girardeau project between now and the end of our fiscal year, primarily related to completing some land acquisitions and design cost.  We fully expect that the funding will come from our free cash flow from operations and draw on the existing credit facility”
  • Pompano potential: “I think that these results are probably indicative of what we can see going forward.”
  • Texas gaming: “It was a lot more active I’m going to say about six months ago, but relatively recently we haven’t heard anything”
  • “Our biggest problem in Black Hawk has been our midweek business. When you have 500 incremental rooms in the market, they were going after the same customers midweek that we are, and it’s highly competitive. So what we have been working on is, how do we drive that midweek business, particularly since we don’t have any convention space that we can use to drive midweek meeting or convention business? How do we do that? And how do we strengthen our acquisition programs?”
  • “For almost two years now… we’ve had pressure on the Bettendorf property, in particular, because of construction on the I-80 bridge. And after 19 months of that bridge being impacted negatively in one fashion or another, last month it finally reopened again, and what that did is it opened up our very profitable secondary markets in Illinois. So we’re starting to see those markets recover again, and we’re also starting to see our weekend business recover again. We were trying to do everything that we could to drive database business midweek because of the bridge issues, and we’re now able to benefit from some of that increased retail play again. The other thing that we did very successfully in the quarter in Bettendorf is utilize the Quad-Cities Convention Center. We did a very aggressive entertainment schedule in the quarter, and we also benefited from an increase in midweek convention business.”
  • “The pressure on Davenport has primarily been as a result of the competitive situation. Our Illinois competitor has been very, very aggressive in the mid-tier segment of the database, which is where we’re seeing the most pressure in Davenport. We’ve been able to maintain strong relationships with the upper end of the database, but again, it’s tough when a competitor is throwing a lot of money at you.”
  • “The biggest improvement obviously came from the tax decrease in Florida. And as I was saying to Larry, I mean, I think that what we’re seeing down there is indicative of trends that we’ll see in the future. When you look at the rest of the portfolio, though, we did see margin improvement at nearly all of our properties; I think it was eleven of fourteen. And this was as a result of, number one, an increase in retail business at nearly all of our properties, which we think is another sign that the economy is starting to slowly recover. But it’s also very, very targeted marketing programs. At almost every one of our properties, we really focused on driving midweek business. And it’s also our cost containment programs, which we have continued at all of our properties.”
  • “As to Mojito Pointe, if anybody spends $450 million in your market, it is going to impact you.
  • “Nemacolin [is] about approximately a $50 million project in that market, so it’s not that large. We believe that even with Nemacolin, incrementally, that between the credit facility, and we still generate a fairly significant amount of free cash flow on an annual basis, that the way these projects lay out and the different construction periods of the two projects, that between free cash flow and the revolver we would anticipate funding them both through those sources. We’ve also mentioned that we’re very aware that in the coming months, sometime over the next period of time here, that it’s likely that we’ll be redoing our senior credit facility. The maturity of the revolver is July of 2012. The term loan’s 2013, and we’ve mentioned several times we’re always looking for the right time and the right way to address that and extend that out. I don’t want to – I think it’d be premature to talk about anything in Davenport at this time.”
  • “This is a company that has over $100 million of NOLs.”
  • Nemacolin: “Our agreement is that we would provide for the build-out of an existing facility that’s already there. We would pay to expand that facility and pay for all the FF&E and the renovation that goes into it. There’s a base fee and then a percentage of revenue to the resort, and then we get the rest of the profit or the EBITDA after that fee’s paid. We anticipate that the fee would probably be somewhere around $350,000 a year or something like that.”
  • “We’re definitely seeing benefit from Alabama closures. But that’s still, obviously, a highly volatile situation, and we’re waiting to see what plays out in Alabama. It is still a very highly competitive market. We’re still seeing some double-digit declines out of the Pensacola market, which has traditionally been a very strong market for us, as a result of the increase in gaming in Florida. And one of the things that is not reflected in what you’re seeing in Biloxi for the quarter is we actually lost one of our biggest special events as result of the oil spill in the Gulf, and we still posted those numbers, so they did a good job.”
  • Caruthersville: “Well, you’ve got a lot of noise in the numbers. There was a $935,000 tax adjustment in the second quarter last year. So if you had looked at the quarter apples-to-apples,  we actually would have been up almost 13% in EBITDA.”
  • Lake Charles: “We have completely revised and revamped our marketing programs there. We have eliminated unprofitable marketing programs. We’ve focused on driving more midweek business. We are seeing some pressure in the market. The market obviously declined in the quarter. We’re seeing some pressure in the market from the secondary markets, particularly Houston, which was down significantly for us. We do have some competitive pressure midweek. Some of our competitors are actually going out and doing midweek promotions, which is something that they haven’t done in the past. But I think for the quarter, the property did an excellent job in terms of containing their costs and marketing smarter.”
  • Q: “Do you expect once Delaware North closes on Jumer’s that they’ll get a little more rational in terms of marketing there and that’ll help give your property there?”
    • A: “We generally see when a property is being marketed that there is an increase in promotional expense. Obviously, you’re trying to drive the top line. So there is usually a rationalization of the expenditures in the market when you see a property like that transact. We’re certainly hoping that that’s the case.”
  • “If we feel that conditions are right in the future, or if there’s a catalyst to raise equity in the company, there might be another attempt to bring in a slug, whether or not it would be as much as we talked about this summer, who knows. I think that would determine on what all we have in the pipeline when, and how the market stacks up.”
  • “For the year, close to half of our maintenance capital is spent on slots or slot related, including conversion kits and stuff like that. “