2008-08-06 15:23:00
Centerplate Reports 2008 Second Quarter Results
STAMFORD, Conn., Aug. 6 /EMWNews/ -- Centerplate, Inc. (Amex: CVP; TSX: CVP.un), today reported financial results for the second quarter and fiscal year-to-date ended July 1, 2008. Net sales in the quarter increased by $37.5 million, or 18.6%, to $238.3 million, compared to net sales of $200.8 million for the second quarter of 2007. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) increased $2.0 million, or 10.7%, to $20.2 million for the second quarter of 2008 compared to $18.3 million in the second quarter of 2007. Excluding $1.5 million in costs associated with the exploration of the company's capital structure and other alternatives, adjusted EBITDA for the second quarter 2008 would have increased $3.5 million, or 18.9%, to $21.7 million compared to the second quarter of 2007. "We are pleased with the increase in net sales and adjusted EBITDA in the second quarter, particularly given the challenging economic environment," said Janet L. Steinmayer, President and Chief Executive Officer of Centerplate. The increases in net sales and adjusted EBITDA for the quarter were driven by strong growth across all major lines of business. During the quarter, MLB sales improved $25.3 million compared to the second quarter of 2007, due to the opening of Nationals Park in Washington, D.C. and improved attendance and per capita spending at a number of other MLB facilities. Arena sales increased $4.0 million mainly due to the opening last October of the Prudential Center, home of the New Jersey Devils, and play-off games at the New Orleans Arena, home of the New Orleans Hornets. Sales at convention centers also increased $2.9 million due to additional events at some of the company's major convention centers, despite decreased spending per event due to the economy. The company also benefited in the quarter from strong sales at the Belmont Stakes primarily due to increased interest in this year's race for the Triple Crown. For the twenty-six weeks ended July 1, 2008, net sales increased $45.3 million, or 13.9%, to $371.5 million, from $326.2 million during the comparable period in 2007. Adjusted EBITDA for the twenty-six week period decreased $2.4 million, or 11.7%, to $18.2 million in 2008 from $20.6 million in 2007. Strong second quarter adjusted EBITDA results were offset by a first quarter decline in adjusted EBITDA as a result of higher labor costs at convention centers in the first quarter, due to the recession, and increased worker's compensation costs. As noted above, adjusted EBITDA results for the first half of the year were also impacted by the $1.5 million in costs associated with the exploration of the company's capital structure and other alternatives. Without these costs, adjusted EBITDA for the twenty-six week period would have been $19.7 million, a decrease of $0.9 million, compared to $20.6 in the first half of 2007. For the second quarter of 2008, the company reported income of $1.0 million, or $0.05 per share, compared to $2.2 million, or $0.10 per share, in the second quarter of 2007. The decline in net income this quarter was due to higher interest expense driven by fees and expenses paid in connection with amendments to the company's credit agreement. For the twenty-six weeks ended July 1, 2008, the company reported a net loss of $10.1 million, or $0.48 per share, compared to a loss of $5.8 million, or $0.26 per share, in the prior year period. This year over year decline was driven by lower operating income in the first quarter of 2008, fees and expenses of $3.3 million associated with amendments to the company's credit agreement and higher interest expense. Steinmayer added, "On the strategic front, we are continuing to make progress in exploring our capital structure and other alternatives. We are vigorously pursuing an outcome that will serve the best interests of our company." Centerplate will discuss its second quarter 2008 financial results on a conference call today, Wednesday, August 6 at 5:30 p.m. EDT. Interested parties may participate in the call by dialing 877-407-8029 approximately 10 minutes before the call is scheduled to begin. International callers should dial 201-689-8029. An audio webcast of the conference call can also be accessed via http://www.centerplate.com. For individuals unable to participate in the conference call, a telephone replay will be available from 8:00 p.m. on August 6, 2008 through midnight on August 20, 2008. The replay can be accessed domestically by dialing 877-660-6853 or for international callers, 201-612-7415. The replay account number is 252 and the pass code for the replay call is 291831.
About Centerplate
Centerplate, with its principal executive office in Stamford, CT, is a
leading provider of food and related services including concessions,
catering and merchandise services in more than 130 sports facilities,
convention centers and other entertainment venues throughout the United
States and Canada. Visit the company online at http://www.centerplate.com.
Presentation of Information in this Press Release
Centerplate presents adjusted EBITDA because covenants in the indenture
governing the company's subordinated notes contain ratios based on this
measure. A reconciliation of adjusted EBITDA to net income or loss is
included in the attached tables.
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. These statements may involve risks and
uncertainties that could cause actual results to differ materially from
those described in such statements. Although Centerplate believes that the
expectations reflected in these forward-looking statements are reasonable,
the company can give no assurance that these expectations will prove to
have been correct or that they will occur. Important factors beyond
Centerplate's control, including general economic conditions, the outcome
of the company's exploration of alternatives, consumer spending levels,
changing trends in our business and competitive environment, the company's
borrowing capacity and the provisions of the credit agreement, the
provisions of the indenture, adverse weather conditions and other factors,
as well as the risks identified in our most recent annual report on Form
10-K and other filings with the Securities and Exchange Commission could
cause actual results to differ materially from Centerplate's expectations.
Centerplate undertakes no obligation to update or review any
forward-looking statement, whether as a result of new information, future
developments or otherwise.
Contact Information
Gael Doar
Director of Communications
203-975-5941
[email protected]
CENTERPLATE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Thirteen Weeks Ended Twenty-Six Weeks Ended
July 1, July 3, July 1, July 3,
2008 2007 2008 2007
----------- ----------- ----------- -----------
(In thousands, except share data)
Net sales $238,292 $200,839 $371,516 $326,172
Cost of sales (excluding
depreciation and
amortization) 194,117 162,948 310,291 269,206
Selling, general and
administrative 24,060 20,161 43,269 37,361
Depreciation and
amortization 8,842 7,713 17,128 15,095
Transaction related expenses - 333 - 333
----------- ----------- ----------- -----------
Operating income 11,273 9,684 828 4,177
----------- ----------- ----------- -----------
Interest expense 9,907 7,079 19,302 15,131
Other income (111) (542) (284) (1,044)
----------- ----------- ----------- -----------
Income (loss) before
income taxes 1,477 3,147 (18,190) (9,910)
Income tax provision
(benefit) 442 907 (8,043) (4,102)
----------- ----------- ----------- -----------
Net income (loss) $1,035 $2,240 $(10,147) $(5,808)
=========== =========== =========== ===========
Basic and Diluted Net
Income (loss) per share with
and without conversion option $0.05 $0.10 $(0.48) $(0.26)
=========== =========== =========== ===========
Weighted average shares
outstanding with
conversion option - 4,060,997 - 4,060,997
Weighted average shares
outstanding without
conversion option 20,981,813 18,463,995 20,981,813 18,463,995
=========== =========== =========== ===========
Total weighted average
shares outstanding 20,981,813 22,524,992 20,981,813 22,524,992
=========== =========== =========== ===========
Dividends declared per
share $0.07 $0.20 $0.27 $0.40
=========== =========== =========== ===========
CENTERPLATE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED)
Thirteen Weeks Twenty-Six Weeks
Ended Ended
July 1, July 3, July 1, July 3,
2008 2007 2008 2007
------- ------- ------- -------
(In thousands)
Net income (loss) $1,035 $2,240 $(10,147) $(5,808)
Income tax provision (benefit) 442 907 (8,043) (4,102)
------- ------- ------- -------
Income (loss) before income taxes 1,477 3,147 (18,190) (9,910)
Adjustments:
Interest expense 9,907 7,079 19,302 15,131
Depreciation and amortization 8,842 7,713 17,128 15,095
------- ------- ------- -------
EBITDA (1) $20,226 $17,939 $18,240 $20,316
======= ======= ======= =======
The following adjustments to EBITDA
were made to compute Adjusted
EBITDA:
EBITDA $20,226 $17,939 $18,240 $20,316
Adjustments:
Transaction related expenses - 333 - 333
------- ------- ------- -------
Adjusted EBITDA (1) $20,226 $18,272 $18,240 $20,649
======= ======= ======= =======
(1) EBITDA is not a measure in accordance with GAAP. EBITDA is not
intended to represent cash flows from operations as determined by GAAP
and should not be used as an alternative to income (loss) before taxes
or net income (loss) as an indicator of operating performance or to
cash flows as a measure of liquidity. We believe that EBITDA is an
important measure of the cash returned on our investment in capital
expenditures under our contracts. Adjusted EBITDA as defined in the
indenture governing our subordinated notes issued in 2003, is
determined as EBITDA as adjusted for transaction related expenses,
contract related losses, other non-cash charges, and the former annual
management fee paid to affiliates of Blackstone and GE Capital, less
any non-cash credits. We present Adjusted EBITDA because covenants in
the indenture governing our 2003 notes contain ratios based on this
measure and it is used by management to among other things evaluate
our ability to make interest and dividend payments.
CENTERPLATE, INC.
SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED)
Thirteen Weeks Twenty-six Weeks
Ended Ended
July 1, July 3, July 1, July 3,
2008 2007 2008 2007
-------- -------- -------- --------
(In thousands)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $1,035 $2,240 $(10,147) $(5,808)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 8,842 7,713 17,128 15,095
Amortization of deferred
financing costs 642 642 1,284 1,284
Interest earned on
restricted cash (32) (117) (111) (232)
Change in fair value of
derivative (528) (554) (311) 118
Deferred tax change 180 749 (8,084) (3,985)
Gain (loss) on disposition of
assets (1) (26) (2) (26)
Other 17 710 (30) 710
Changes in assets and
liabilities 13,770 14,694 22,710 9,569
-------- -------- -------- --------
Net cash provided by
operating activities 23,925 26,051 22,437 16,725
-------- -------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of business - - (1,000) -
Purchase of property and
equipment (4,699) (4,804) (8,123) (8,110)
Proceeds from sale of property
and equipment 32 15 58 17
Contract rights acquired (9,882) (1,646) (12,678) (4,043)
Restricted cash 351 391 354 849
-------- -------- -------- --------
Net cash used in investing
activities (14,198) (6,044) (21,389) (11,287)
-------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Restricted cash 8,033 - 8,033 -
Repayments - revolving loans (35,000) (30,000) (42,500) (41,000)
Borrowings - revolving loans 26,500 15,000 62,500 38,500
Net Borrowings - swingline
loans (3,000) (4,000) (4,000) -
Principal payments on long-term
debt (8,302) (269) (8,840) (538)
Dividend payments (2,770) (4,460) (6,925) (8,920)
Increase (decrease) in bank
overdrafts 8,529 5,180 2,286 1,342
-------- -------- -------- --------
Net cash provided by (used
in) financing activities (6,010) (18,549) 10,554 (10,616)
-------- -------- -------- --------
Effect of exchange rate on cash 93 (240)
INCREASE IN CASH 3,810 1,458 11,362 (5,178)
CASH AND CASH EQUIVALENTS:
Beginning of period 41,405 32,955 33,853 39,591
-------- -------- -------- --------
End of period $45,215 $34,413 $45,215 $34,413
======== ======== ======== ========
CENTERPLATE, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)
July 1, January 1,
2008 2008
---------- ----------
ASSETS (in thousands)
Current assets $118,884 $95,517
Property and equipment, net 53,222 51,986
Contract rights, net 95,106 85,183
Cost in excess of net assets acquired 41,142 41,142
Deferred financing costs, net 9,077 10,361
Other assets 49,475 48,162
---------- ----------
TOTAL ASSETS $366,906 $332,351
========== ==========
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
Current liabilities $164,339 $114,992
Long-term debt 214,494 223,334
Other liabilities 21,584 11,559
Total stockholders' deficiency (33,511) (17,534)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $366,906 $332,351
========== ==========
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