-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H1OeWWzP7gH3lLZJ7Y04keHF37Pnh89UhTBc4ybzhLg8v6zBVUHBAOIxSKqgUtBW +mFesnZjKn+vwWoQBgVW8g== 0000950134-04-011926.txt : 20040810 0000950134-04-011926.hdr.sgml : 20040810 20040810172627 ACCESSION NUMBER: 0000950134-04-011926 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040810 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAKES ENTERTAINMENT INC CENTRAL INDEX KEY: 0001071255 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 411913991 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24993 FILM NUMBER: 04965276 BUSINESS ADDRESS: STREET 1: 130 CHESHIERE LANE CITY: MINNETONKA STATE: MN ZIP: 55305 BUSINESS PHONE: 6124499092 MAIL ADDRESS: STREET 1: 130 CHESHIRE LANE CITY: MINNETONKA STATE: MN ZIP: 55305 FORMER COMPANY: FORMER CONFORMED NAME: LAKES GAMING INC DATE OF NAME CHANGE: 19980929 8-K 1 c87519e8vk.txt FORM 8-K ============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 10, 2004 LAKES ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) MINNESOTA 0-24993 41-1913991 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 130 CHESHIRE LANE, MINNETONKA, MINNESOTA 55305 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (952) 449-9092 NOT APPLICABLE (Former name or former address, if changed since last report) ============================================================================== ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 99.1 Lakes Entertainment, Inc. Press Release dated August 10, 2004. 99.2 WPT Enterprises, Inc. financial information. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 10, 2004, Lakes Entertainment, Inc. issued a press release that included financial information for the second quarter ended July 4, 2004. A copy of the press release is being furnished to the Securities and Exchange Commission and is attached as Exhibit 99.1 to this Form 8-K. On August 9, 2004, WPT Enterprises, Inc., a majority owned indirect subsidiary of Lakes Entertainment, Inc., filed a registration statement with the Securities and Exchange Commission which included financial information for the second quarter ended July 4, 2004. A copy of the WPT Enterprises, Inc. financial information included in the registration statement is being furnished to Securities and Exchange Commission and is attached as Exhibit 99.2 to this Form 8-K. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LAKES ENTERTAINMENT, INC. (Registrant) Date: August 10, 2004 By: /s/Timothy J. Cope ------------------------------- Name: Timothy J. Cope Title: President and Chief Financial Officer EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release dated August 10, 2004. 99.2 WPT Enterprises, Inc. financial information.
EX-99.1 2 c87519exv99w1.txt PRESS RELEASE EXHIBIT 99.1 NEWS RELEASE LAKES ENTERTAINMENT, INC. [LAKES ENTERTAINMENT, INC. LOGO] 130 CHESHIRE LANE MINNETONKA, MN 55305 952-449-9092 952-449-9353 (FAX) WWW.LAKESENTERTAINMENT.COM TRADED: NASDAQ "LACO" - -------------------------------------------------------------------------------- FOR FURTHER INFORMATION CONTACT: Timothy J. Cope 952-449-7030 - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE: Tuesday, August 10, 2004 LAKES ENTERTAINMENT, INC. ANNOUNCES RESULTS FOR SECOND QUARTER 2004 MINNEAPOLIS, AUGUST 10, 2004 - LAKES ENTERTAINMENT, INC. (NASDAQ "LACO") today announced results for the second quarter ended July 4, 2004. Revenue for the three months ended July 4, 2004 totaled $4.7 million, compared to $3.0 million in the prior year period. Net loss for the quarter was $7.2 million and basic and diluted losses were $0.32 per share. This compares with net earnings of $0.8 million and basic and diluted earnings of $0.04 per share for the quarter ended June 29, 2003. Revenues for the current and prior year quarters were derived primarily from license fees related to the World Poker Tour (WPT) series. The increase in revenue is primarily due to an increase in license fees related to season two episodes delivered to the Travel Channel, LLC (TRV) during the second quarter of 2004, compared to license fees related to season one episodes delivered to TRV during the second quarter of 2003. Also contributing to the increase was revenue of approximately $0.5 million related to WPT-related licensing, sponsorship and merchandise included in total revenue for the three months ended July 4, 2004. In April 2004, TRV exercised its option to broadcast the first of a possible five additional seasons. WPT receives fixed license payments from TRV subject to satisfaction of production milestones and other conditions. Total costs and expenses were $12.4 million and $1.9 million for the three months ended July 4, 2004 and June 29, 2003, respectively. Included in second quarter 2004, costs and expenses is an impairment charge of approximately $6.4 million related to the write-off of Lakes' investment in the Nipmuc Nation casino development project. This impairment charge was the result of the Nipmuc Nation being denied recognition as an Indian Tribe and sovereign government within the meaning of federal law by the Bureau of Indian Affairs. During the three months ended June 29, 2003, costs and expenses were reduced by a reversal of unused litigation accrual of $3.2 million under the Company's prior agreement to indemnify Grand Casinos, Inc. in connection with the Stratosphere litigation matters. Selling, general and administrative expenses decreased from $3.8 million for the three months ended June 29, 2003 to $3.2 million for the three months ended July 4, 2004. This decrease is primarily due to a decrease in professional fees incurred during the 2003 period associated with the sale of property in Las Vegas, Nevada. World Poker Tour production costs increased from $1.2 million for the three months ended June 29, 2003 to $2.6 million for the three months ended July 4, 2004. In the current year period WPT production costs and related episode revenues were recognized in the period the relative episode was delivered to TRV. However, because WPT did not have an executed agreement in 2002 when a portion of production costs related to the WPT episodes delivered during the three months ended, June 29, 2003, were incurred, such costs were expensed in 2002 and the first quarter of 2003, rather than being capitalized. Lakes Entertainment, Inc. currently has development and management agreements with three separate Tribes for one new casino operation in Michigan and two in California. In addition, Lakes has agreements with the Nipmuc Nation for the development and management of a potential additional casino on the East Coast. However, the Nipmuc Nation has been denied recognition as an Indian Tribe by the Bureau of Indian Affairs. Lakes also has agreements for the development of an additional casino on Indian-owned land in California through a joint venture with MRD Gaming, which is currently being disputed by the Tribe. Additionally, the Company owns approximately 80% of World Poker Tour, LLC, a media and entertainment company principally engaged in the development, production and marketing of gaming themed televised programming, the licensing and sale of branded products and the sale of corporate sponsorships. Lakes Entertainment, Inc. common shares are traded on the Nasdaq National Market under the trading symbol "LACO". - -------------------------------------------------------------------------------- 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, 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 contracts; continued indemnification obligations to Grand Casinos; 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; and reliance on Lakes' management. For more information, review the Company's filings with the Securities and Exchange Commission. - -------------------------------------------------------------------------------- LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
JULY 4, 2004 DECEMBER 28, 2003 - -------------------------------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $19,405 $25,340 Accounts receivable, net 323 1,038 Deferred tax asset 5,385 5,385 Prepaids 2,878 2,119 Other current assets 914 1,645 - -------------------------------------------------------------------------------------------------------------------- Total Current Assets 28,905 35,527 - -------------------------------------------------------------------------------------------------------------------- Property and Equipment-Net 6,485 6,492 - -------------------------------------------------------------------------------------------------------------------- Other Assets: Land held under contract for sale 4,863 4,612 Land held for development 14,159 14,536 Notes receivable 88,135 84,682 Investments 7,893 8,717 Deferred tax asset 7,472 6,634 Other long-term assets 9,036 8,860 - -------------------------------------------------------------------------------------------------------------------- Total Other Assets 131,558 128,041 - -------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $166,948 $170,060 ==================================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $1,360 $1,906 Income taxes payable 7,042 7,215 Accrued payroll and related costs 589 497 Other accrued expenses 4,445 3,018 - -------------------------------------------------------------------------------------------------------------------- Total Current Liabilities 13,436 12,636 - -------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 13,436 12,636 - -------------------------------------------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES Shareholders' Equity: Capital stock, $.01 par value; authorized 100,000 shares; 22,226 and 21,474 common shares issued and outstanding at July 4, 2004, and December 28, 2003, respectively 222 215 Additional paid-in-capital 136,290 132,291 Retained Earnings 17,000 24,918 - -------------------------------------------------------------------------------------------------------------------- Total Shareholders' Equity 153,512 157,424 - -------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $166,948 $170,060 ====================================================================================================================
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED ------------------ JULY 4, 2004 JUNE 29, 2003 ------------ ------------- REVENUES: License fee income $4,718 $2,954 - --------------------------------------------------------------------------------------------------------- Total Revenues 4,718 2,954 - --------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES: Selling, general and administrative 3,155 3,788 Production costs 2,645 1,162 Impairment losses 6,407 - Reversal of litigation and claims accrual - (3,212) Depreciation and amortization 150 131 - --------------------------------------------------------------------------------------------------------- Total Costs and Expenses 12,357 1,869 - --------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) FROM OPERATIONS (7,639) 1,085 - --------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 43 314 Equity in earnings (loss) of unconsolidated affiliates (23) (60) Other - (1) - --------------------------------------------------------------------------------------------------------- Total other income, net 20 253 - --------------------------------------------------------------------------------------------------------- Earnings (loss) before income taxes (7,619) 1,338 Provision (benefit) for income taxes (461) 549 - --------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) ($7,158) $789 ========================================================================================================= BASIC EARNINGS (LOSS) PER SHARE ($0.32) $0.04 ========================================================================================================= DILUTED EARNINGS (LOSS) PER SHARE ($0.32) $0.04 ========================================================================================================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 22,212 21,276 DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS - 1 - --------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE COMMON AND DILUTED SHARES OUTSTANDING 22,212 21,277 =========================================================================================================
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
SIX MONTHS ENDED ---------------- JULY 4, 2004 JUNE 29, 2003 ------------ ------------- REVENUES: License fee income 8,858 $3,504 - --------------------------------------------------------------------------------------------------------- Total Revenues 8,858 3,504 - --------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES: Selling, general and administrative 6,415 5,866 Production costs 5,117 2,063 Impairment losses 6,407 - Reversal of litigation and claims accrual - (3,212) Depreciation and amortization 293 259 - --------------------------------------------------------------------------------------------------------- Total Costs and Expenses 18,232 4,976 - --------------------------------------------------------------------------------------------------------- LOSS FROM OPERATIONS (9,374) (1,472) - --------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 91 551 Equity in loss of unconsolidated affiliates 396 (147) Other 42 158 - --------------------------------------------------------------------------------------------------------- Total other income, net 529 562 - --------------------------------------------------------------------------------------------------------- Loss before income taxes (8,845) (910) Benefit for income taxes (927) (372) - --------------------------------------------------------------------------------------------------------- NET LOSS ($7,918) ($538) ========================================================================================================= BASIC LOSS PER SHARE ($0.36) ($0.03) ========================================================================================================= DILUTED LOSS PER SHARE ($0.36) ($0.03) ========================================================================================================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 21,982 21,276 DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS - - - --------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE COMMON AND DILUTED SHARES OUTSTANDING 21,982 21,276 =========================================================================================================
EX-99.2 3 c87519exv99w2.txt FINANCIAL INFORMATION EXHIBIT 99.2 WPT Enterprises, Inc. Recent Results Financial and operating data discussed below for the three and six months ended July 4, 2004, in the opinion of management, include all adjustments (consisting of normal recurring accruals) for a fair presentation of such information. The results of operations data presented for three and six months ended July 4, 2004 are not necessarily indicative of the results of operations for the full 2004 fiscal year.
Six Months Ended Three Months Ended ---------------- ------------------ June 29, 2003 July 4, 2004 June 29, 2003 July 4, 2004 ------------- ------------ ------------- ------------ Revenues ................................... $ 3,503,630 $ 8,858,279 $ 2,953,630 $ 4,718,647 ------------ ------------ ------------ ------------ Gross Margin ............................... 1,413,592 3,741,028 1,783,398 2,073,087 Expenses: Selling and Administrative ............ 706,655 1,965,084 401,428 1,163,721 Depreciation .......................... 39,225 66,711 21,270 32,837 ------------ ------------ ------------ ------------ Earnings (Loss) from Operations ............ 667,712 1,709,233 1,360,700 876,529 Interest (Income) Expense .................. 73,784 30,410 37,252 (10,731) ------------ ------------ ------------ ------------ Net Earnings (Loss) ........................ $ 593,928 $ 1,678,823 $ 1,323,448 $ 887,260 ============ ============ ============ ============ Net Earnings (Loss) per Common Share--Basic .......................... $ .05 $ .12 $ .10 $ .06 ============ ============ ============ ============ Net Earnings (Loss) per Common Share--Diluted ........................ $ .04 $ .10 $ .08 $ .06 ============ ============ ============ ============ Weighted Average Common Shares Outstanding--Basic .................... 13,066,667 13,946,667 13,360,000 14,240,000 ------------ ------------ ------------ ------------ Dilutive Effect of Restricted Stock ........ 1,997,440 1,398,400 1,797,440 1,198,400 Dilutive Effect of Stock Options ........... 932,053 652,053 838,720 558,720 ------------ ------------ ------------ ------------ Weighted Average Common Shares Outstanding--Diluted .................. 15,996,160 15,997,120 15,996,160 15,997,120 ============ ============ ============ ============
Total revenues were $8.9 million for the six months ended July 4, 2004 compared to $3.5 million for the comparable period in the prior year. Revenues for the current and prior year periods were derived primarily from license fees related to the World Poker Tour series. The increase in revenue is primarily due to higher per episode license fees received from the Travel Channel for our Season Two programming and a greater number of episodes delivered to the Travel Channel during the six months ended July 4, 2004, compared to the per episode license fee for our Season One programming and the number of episodes delivered to the Travel Channel during the comparable 2003. Also contributing to the increase for the 2004 period was revenue of approximately $0.9 million resulting from our licensing, sponsorship and merchandising activities, compared to no significant revenue from such activities during the comparable 2003 period. Our production costs increased from $2.1 million for the six months ended June 29, 2003 to $5.1 million for the six months ended July 4, 2004. The increase was also due to a greater number of episodes being delivered to the Travel Channel during the 2004 period compared to the comparable 2003 period. Productions costs for the six months ended June 29, 2003 excluded a significant amount of costs related to episodes delivered in that period that were expensed as incurred prior to the signing of the Travel Channel contract in March 2003. The gross margins were comparable for the respective six month periods due to higher per episode license fees during the 2004 period that were offset by the exclusion of production costs in the comparable 2003 period. Our net income for the six months ended July 4, 2004 was approximately $1.7 million, with basic earnings of $.12 per share and diluted earnings of $.10 per share. This compares with net income of approximately $594,000, with basic earnings of $.05 per share and diluted earnings of $.04 per share, for the six months ended June 29, 2003. Total revenues were $4.7 million for the three months ended July 4, 2004, compared to $3.0 million in the prior year period. Revenues for the 2004 second quarter and comparable prior year periods were primarily derived from license fees related to the World Poker Tour television series. The increase in revenue is primarily due to higher per episode license fees received from the Travel Channel for episodes delivered during the three months ended July 4, 2004, partially offset by fewer episodes delivered during the 2004 period than during the comparable 2003 period. Also contributing to the increase for the second quarter of 2004 was revenue of approximately $0.5 million that resulted from our licensing, sponsorship and merchandising activity, compared to no significant revenue from such activities during the second quarter of 2003. Our production costs increased from $1.2 million for the three months ended June 29, 2003 to $2.6 million for the three months ended July 4, 2004. Production costs for the three months ended June 28, 2003 excluded a significant amount of costs related to episodes delivered in that period that were expensed as incurred prior to the signing of the Travel Channel contract in March 2003. This resulted in a gross margin of 60% for the three months ended June 29, 2003 compared to 44% for the three months ended July 4, 2004. Our net income for the three months ended July 4, 2004 was approximately $887,000, and basic and diluted earnings were $.06 per share. This compares with net income of $1.3 million, with basic earnings of $.10 per share and diluted earnings of $.08 per share, for the three months ended June 29, 2003. The decrease was due to the unusually high gross margin for the three months ended June 29, 2003 and an additional $750,000 of general and administrative expenses for the three months ended July 4, 2004. -----END PRIVACY-ENHANCED MESSAGE-----