-----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, KEjJpe9FZsatHer9vQMc1nwjRbrusoWihhld3ViYSnP8GKjEK+CUA3BBv0i5r+VC g87q09Bo9mSz6cA+ssTylA== 0000950134-04-016548.txt : 20041105 0000950134-04-016548.hdr.sgml : 20041105 20041105162911 ACCESSION NUMBER: 0000950134-04-016548 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041105 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041105 DATE AS OF CHANGE: 20041105 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: 041123124 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 c89473e8vk.txt FORM 8-K ================================================================================ UNITED STATES 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): November 5, 2004 LAKES ENTERTAINMENT, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Minnesota 0-24993 41-1913991 ------------------------------ ----------------------- ------------------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL AND CONDITION. On November 5, 2004, Lakes Entertainment, Inc. issued a press release that included financial information for the third quarter ended October 3, 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. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not Applicable (b) Not Applicable (c) Exhibits 99.1 Lakes Entertainment, Inc. Press Release dated November 5, 2004. 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: November 5, 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 November 5, 2004. EX-99.1 2 c89473exv99w1.txt PRESS RELEASE EXHIBIT 99.1 NEWS RELEASE LAKES ENTERTAINMENT, INC. 130 CHESHIRE LANE [LAKES ENTERTAINMENT, INC. LOGO] 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: Friday, November 5, 2004 LAKES ENTERTAINMENT, INC. ANNOUNCES RESULTS FOR THIRD QUARTER 2004 MINNEAPOLIS, NOVEMBER 5, 2004 -- LAKES ENTERTAINMENT, INC. (NASDAQ "LACO") today announced results for the third quarter ended October 3, 2004. Revenue for the three months ended October 3, 2004 totaled $3.0 million, compared to $0.4 million in the prior year period. Net loss for the quarter was $1.7 million and basic and diluted losses were $0.08 per share. This compares with a net loss of $1.3 million and basic and diluted losses of $0.06 per share for the quarter ended September 28, 2003. During the current year quarter, WPT Enterprises, Inc. (WPT) became a separate public company as a result of the completion of an initial public offering. Lakes remains a majority shareholder of WPT, owning approximately 64% of the outstanding common stock. As a result, Lakes' consolidated results continue to include WPT operations. All revenues for the current and prior year quarters were derived from WPT operations and related primarily to license fees from the World Poker Tour television 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 third quarter of 2004, compared to license fees related to season one episodes recognized during the third quarter of 2003. Also contributing to the increase was revenue of approximately $0.6 million related to WPT-related licensing, host fees, sponsorship and merchandise included in total revenue for the three months ended October 3, 2004. In April 2004, TRV exercised its option to broadcast season three which is the first of a possible five additional seasons. WPT is currently in production of season three episodes. WPT receives fixed license payments from TRV subject to satisfaction of production milestones and other conditions. License revenue is recognized upon delivery of completed episodes to TRV. Total costs and expenses were $5.8 million and $2.6 million for the three months ended October 3, 2004 and September 28, 2003, respectively. Selling, general and administrative expenses increased from $2.2 million for the three months ended September 28, 2003 to $3.7 million for the three months ended October 3, 2004. WPT selling, general and administrative costs were $1.5 million and $0.5 million for the three months ended October 3, 2004 and September 28, 2003, respectively. This increase is primarily due to an increase in legal and consulting fees incurred during the 2004 period associated with WPT business development, and an increase in WPT payroll costs resulting from growth related to becoming a separate public company. Lakes selling, general and administrative costs were $2.2 million and $1.7 million for the three months ended October 3, 2004 and September 28, 2003. This increase is due primarily to professional fees incurred related to business development. Production costs, which related to WPT's production of the World Poker Tour episodes, increased from $0.3 million for the three months ended September 28, 2003 to $1.9 million for the three months ended October 3, 2004. The increase in production costs relates to an increased number of episodes delivered to TRV during the current year period. As shown in the consolidated balance sheet data, Lakes' current assets include $28 million in cash held by WPT and $6 million in WPT's short-term investments. WPT cash and investments will be used in WPT's business and are not available to the parent company for its business. The consolidated balance sheet also reflects minority interest of $11 million, consistent with Lakes' ownership of 64% of WPT's outstanding common stock. Lyle Berman, Chairman and Chief Executive Office of Lakes commented, "We remain focused on our core business of developing and managing Indian-owned casinos." Mr. Berman continued, "However, we are also excited about the successful completion of the initial public offering of WPT Enterprises, Inc. and the added value this has brought to our company." Lakes Entertainment, Inc. currently has development and management agreements with three separate Tribes for one new casino operation in Michigan and two in California. 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 64% of WPT Enterprises, Inc. (Nasdaq "WPTE"), a separate publicly held 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; reliance on Lakes' management; and the fact that the WPT shares held by Lakes are currently not liquid assets, and there is no assurance that Lakes will be able to realize value from these holdings equal to the current or future market value of WPT common stock. There are also risks and uncertainties relating to WPT that may have a material effect on the Company's consolidated results of operations or the market value of the WPT shares held by the Company, including WPT's significant dependence on the Travel Channel as a source of revenue; the potential that WPT's television programming will fail to maintain a sufficient audience; the risk that competitors with greater financial resources or marketplace presence might develop television programming that would directly compete with WPT's television programming; the risk that WPT may not be able to protect its entertainment concepts, current and future brands and other intellectual property rights; risks associated with future expansion into new or complementary businesses; the termination or impairment of WPT's relationships with key licensing and strategic partners; and WPT's dependence on its senior management team. For more information, review the filings of the Company and WPT with the Securities and Exchange Commission. - -------------------------------------------------------------------------------- LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
OCTOBER 3, 2004 DECEMBER 28, 2003 - -------------------------------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $41,355 $25,340 (balance includes $27.6 million and $0 of WPT Enterprises, Inc. cash) Short-term investments 7,188 - (balance includes $6 million and $0 of WPT Enterprises, Inc. short-term investments) Accounts receivable, net 582 1,038 Deferred tax asset 1,504 5,385 Prepaids 1,832 2,119 Other current assets 1,165 1,645 - -------------------------------------------------------------------------------------------------------------------- Total Current Assets 53,626 35,527 - -------------------------------------------------------------------------------------------------------------------- Property and Equipment-Net 6,641 6,492 - -------------------------------------------------------------------------------------------------------------------- Other Assets: Land held under contract for sale 4,939 4,612 Land held for development 14,195 14,536 Notes receivable 90,939 84,682 Investments 7,937 8,717 Deferred tax asset 12,024 6,634 Other long-term assets 9,393 8,860 - -------------------------------------------------------------------------------------------------------------------- Total Other Assets 139,427 128,041 - -------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $199,694 $170,060 ==================================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $1,428 $1,906 Income taxes payable 6,426 7,215 Accrued payroll and related costs 573 497 Deferred revenue 4,067 505 Other accrued expenses 2,504 2,513 - -------------------------------------------------------------------------------------------------------------------- Total Current Liabilities 14,998 12,636 - -------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 14,998 12,636 - -------------------------------------------------------------------------------------------------------------------- Common shares issued by subsidiary subject to repurchase 608 - COMMITMENTS AND CONTINGENCIES Minority Interest 11,156 - Shareholders' Equity: Capital stock, $.01 par value; authorized 200,000 shares; 22,247 and 21,474 common shares issued and outstanding at October 3, 2004, and December 28, 2003, respectively 235 215 Additional paid-in-capital 157,415 132,291 Retained Earnings 15,282 24,918 - -------------------------------------------------------------------------------------------------------------------- Total Shareholders' Equity 172,932 157,424 - -------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $199,694 $170,060 ====================================================================================================================
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED ------------------------------------- OCTOBER 3, 2004 SEPTEMBER 28, 2003 --------------- ------------------ REVENUES: License fee income $2,974 $377 - --------------------------------------------------------------------------------------------------------- Total Revenues 2,974 377 - --------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES: Selling, general and administrative 3,710 2,224 Production costs 1,942 280 Depreciation and amortization 163 135 - --------------------------------------------------------------------------------------------------------- Total Costs and Expenses 5,815 2,639 - --------------------------------------------------------------------------------------------------------- LOSS FROM OPERATIONS (2,841) (2,262) - --------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 104 98 Equity in loss of unconsolidated affiliates (30) (50) Other 1 - - --------------------------------------------------------------------------------------------------------- Total other income, net 75 48 - --------------------------------------------------------------------------------------------------------- Loss before income taxes (2,766) (2,214) Benefit for income taxes (1,101) (912) - --------------------------------------------------------------------------------------------------------- Loss before minority interest (1,665) (1,302) Minority interest (53) - - --------------------------------------------------------------------------------------------------------- NET LOSS ($1,718) ($1,302) ========================================================================================================= BASIC LOSS PER SHARE ($0.08) ($0.06) ========================================================================================================= DILUTED LOSS PER SHARE ($0.08) ($0.06) ========================================================================================================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 22,232 21,278 DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS - - - --------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE COMMON AND DILUTED SHARES OUTSTANDING 22,232 21,278 =========================================================================================================
LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
NINE MONTHS ENDED ------------------------------------ OCTOBER 3, 2004 SEPTEMBER 28, 2003 --------------- ------------------ REVENUES: License fee income $11,832 $3,881 - --------------------------------------------------------------------------------------------------------- Total Revenues 11,832 3,881 - --------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES: Selling, general and administrative 10,125 8,063 Production costs 7,059 2,370 Impairment losses 6,407 - Reversal of litigation and claims accrual - (3,212) Depreciation and amortization 456 394 - --------------------------------------------------------------------------------------------------------- Total Costs and Expenses 24,047 7,615 - --------------------------------------------------------------------------------------------------------- LOSS FROM OPERATIONS (12,215) (3,734) - --------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 195 649 Equity in earnings (loss) of unconsolidated affiliates 366 (197) Other 43 158 - --------------------------------------------------------------------------------------------------------- Total other income, net 604 610 - --------------------------------------------------------------------------------------------------------- Loss before income taxes (11,611) (3,124) Benefit for income taxes (2,028) (1,284) - --------------------------------------------------------------------------------------------------------- Loss before minority interest (9,583) (1,840) Minority interest (53) - - --------------------------------------------------------------------------------------------------------- NET LOSS ($9,636) ($1,840) ========================================================================================================= BASIC LOSS PER SHARE ($0.44) ($0.09) ========================================================================================================= DILUTED LOSS PER SHARE ($0.44) ($0.09) ========================================================================================================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 22,063 21,278 DILUTIVE EFFECT OF STOCK COMPENSATION PROGRAMS - - - --------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE COMMON AND DILUTED SHARES OUTSTANDING 22,063 21,278 =========================================================================================================
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