SPARTANBURG, S.C., Aug. 9 /PRNewswire-FirstCall/ -- Centerplate, Inc. (AMEX:CVP)(TSX: CVP.un), today reported financial results for the second quarter and fiscal year-to-date ended July 4, 2006. Net sales increased by $8.6 million, or approximately 4.7%, to $190.7 million, compared to net sales of $182.1 million for the second quarter of 2005. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) increased $1.5 million, or approximately 8.1%, to $19.5 million for the second quarter of 2006 compared to $18.0 million in the second quarter of 2005. The increase in adjusted EBITDA was due to the improvement in net sales as well as a 2.6% decline in selling, general and administrative expenses.
During the quarter, Major League Baseball (MLB) sales improved $5.7 million compared to the second quarter of 2005. Five additional games were played during the quarter, and per capita spending and attendance were higher at a number of our MLB facilities. An increase in the number of events at the company's arena and amphitheater facilities improved sales by $4.0 million, and sales at convention centers increased approximately $1.8 million, compared to the second quarter of 2005. Partially offsetting the improvement in sales was the termination of some of our contracts which accounted for a decline in sales (net of new accounts) of $2.9 million.
"We are pleased to be reporting improved sales and adjusted EBITDA for the second quarter of 2006. The management team continues to focus on identifying the right business opportunities, and containing our selling, general and administrative expenses while working to distinguish Centerplate through its culinary, design, branded products and speed of service initiatives," said Janet L. Steinmayer, President and Chief Executive Officer of Centerplate.
For the twenty-six weeks ended July 4, 2006, net sales increased $14.9 million, or approximately 5.2%, to $304.2 million from $289.3 million during the comparable period in 2005. Adjusted EBITDA for the twenty-six week period increased $2.4 million, or approximately 11.9%, to $22.9 million in 2006 from $20.5 million in 2005.
The company reported a net loss of $0.1 million for the second quarter of 2006 compared to a loss of $2.5 million in the second quarter of 2005. For the twenty-six weeks ended July 4, 2006, the company reported a net loss of $5.7 million compared to a net loss of $6.9 million in the prior year period. On a per share basis, Centerplate reported a loss that rounded to $0.00 for the second quarter of 2006, compared to a net loss of $0.11 for the comparable period in 2005, and for the twenty-six week period ended July 4, 2006, a net loss of $0.25 compared to a net loss of $0.31 per share for the comparable period in 2005.
As previously announced, Centerplate will make its 32nd consecutive monthly distribution to IDS holders on August 18, 2006 at the anticipated annual rate of approximately $1.56 per IDS.
Centerplate will discuss its second quarter 2006 financial results on a conference call today, Wednesday, August 9 at 5:30 p.m. eastern daylight time. 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 9, 2006 through midnight on August 30, 2006. 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 209974.
About Centerplate Centerplate is a leading provider of catering, concessions, merchandise and facility management services for sports facilities, convention centers and other entertainment venues. 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, consumer spending levels, changing trends in our business and competitive environment, adverse weather conditions and other factors, as well as the risks identified in our most recent annual report on Form 10-K, 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.
CENTERPLATE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Thirteen Weeks Ended Twenty-six Weeks Ended
July 4, June 28, July 4, June 28,
2006 2005 2006 2005
(In thousands, except share data) Net sales $190,699 $182,071 $304,204 $289,291 Cost of sales 154,174 146,410 249,834 235,441
Selling, general and
administrative 17,413 17,884 32,096 33,650
Depreciation and
amortization 7,074 7,296 14,125 14,101
Contract related losses - - 100 - Operating income 12,038 10,481 8,049 6,099 Interest expense 6,207 13,123 12,746 18,523 Other income, net (341) (219) (663) (305) Income (loss) before
income taxes 6,172 (2,423) (4,034) (12,119) Income tax provision
(benefit) 6,238 50 1,630 (5,213) Net loss available to
common stock with or
without the conversion
option $(66) $(2,473) $(5,664) $(6,906) Basic and Diluted Net
Loss per share with and
without conversion
option $(0.00) $(0.11) $(0.25) $(0.31) Weighted average shares
outstanding with
conversion option 4,060,997 4,060,997 4,060,997 4,060,997
Weighted average shares
outstanding without
conversion option 18,463,995 18,463,995 18,463,995 18,463,995
Total weighted average
shares outstanding 22,524,992 22,524,992 22,524,992 22,524,992 Dividends declared per
share $0.20 $0.20 $0.40 $0.40 CENTERPLATE, INC. RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED) Thirteen Weeks Twenty-six Weeks
Ended Ended
July 4, June 28, July 4, June 28,
2006 2005 2006 2005
(In thousands) Net loss $(66) $(2,473) $(5,664) $(6,906)
Income tax provision (benefit) 6,238 50 1,630 (5,213)
Income (loss) before income taxes 6,172 (2,423) (4,034) (12,119)
Adjustments:
Interest expense (1) 6,207 13,123 12,746 18,523
Depreciation and amortization 7,074 7,296 14,125 14,101
EBITDA (2) $19,453 $17,996 $22,837 $20,505 The following adjustments to EBITDA
were made to compute Adjusted EBITDA: EBITDA $19,453 $17,996 $22,837 $20,505
Adjustments:
Contract related losses (3) - - 100 -
Adjusted EBITDA (2) $19,453 $17,996 $22,937 $20,505 (1) Included in interest expense for the 13 and 26 weeks ended June 28,
2005 is $5.8 million in expenses related to entering into our credit
agreement on April 1, 2005. The $5.8 million includes a prepayment
premium of approximately $4.6 million on the prior credit facility
and a $1.2 million non-cash charge for the write-off of deferred
financing costs. Additionally, for the 13 and 26 weeks ended July 4,
2006 included in interest is a credit of $0.5 million and $0.9
million, respectively, related to the change in the fair value of our
derivatives as compared to a charge of $0.6 million and $0.5 million,
respectively, for the 13 and 26 week periods ended June 28, 2005. (2) 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. (3) Reflects non-cash expense for the write-off of contract rights
associated with a terminated contract.
CENTERPLATE, INC. SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED) Thirteen Weeks Twenty-six Weeks
Ended Ended
July 4, June 28, July 4, June 28,
2006 2005 2006 2005
(In thousands)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(66) $(2,473) $(5,664) $(6,906)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Depreciation and amortization 7,074 7,296 14,125 14,101
Amortization of deferred
financing costs 642 1,803 1,285 2,185
Non-cash interest earned on
restricted cash (104) (45) (198) (45)
Derivative non-cash interest (534) 601 (932) 496
Contract related losses - - 100 -
Deferred tax change 6,207 50 1,515 (5,213)
Loss on disposition of assets (18) (3) (31) (4)
Other 308 (92) 313 (159) Changes in assets and
liabilities 19,141 15,746 20,575 15,007 Net cash provided by
operating activities 32,650 22,883 31,088 19,462 CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (3,598) (3,977) (4,833) (7,509)
Proceeds from sale of property
and equipment 148 7 165 336
Contract rights acquired (3,600) (1,633) (6,818) (6,277)
Return of unamortized capital
investment 1,828 - 1,828 -
Restricted cash - 180 - - Net cash used in
investing activities (5,222) (5,423) (9,658) (13,450) CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments - revolving loans (5,000) (40,750) (5,000) (44,250)
Borrowings - revolving loans 5,000 22,000 5,000 44,250
Net Borrowings - swingline
loans (1,000) - - -
Proceeds from long-term debt - 107,500 - 107,500
Retirement of existing long-
term borrowings - (65,000) - (65,000)
Principal payments on long-
term debt (269) - (538) -
Payment of financing costs - (6,403) - (7,194)
Dividend payments (4,460) (4,460) (8,920) (8,920)
Increase (decrease) in bank
overdrafts 1,950 1,232 1,716 (461) Net cash provided by
(used in) financing
activities (3,779) 14,119 (7,742) 25,925 INCREASE IN CASH 23,649 31,579 13,688 31,937 CASH AND CASH EQUIVALENTS:
Beginning of period 31,449 25,135 41,410 24,777 End of period $55,098 $56,714 $55,098 $56,714 CENTERPLATE, INC. SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED) July 4, January 3,
2006 2006
(In thousands)
ASSETS
Current assets $109,218 $88,790
Property and equipment, net 48,582 49,725
Contract rights, net 78,112 80,557
Cost in excess of net assets
acquired 41,142 41,142
Deferred financing costs, net 14,214 15,499
Other assets 42,614 42,312
TOTAL ASSETS $333,882 $318,025 LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $100,063 $70,822
Long-term debt 210,326 210,864
Other liabilities 7,809 6,384 Common Stock with conversion
option, par value $0.01,
exchangeable for subordinated
debt, net of discount 14,352 14,352 Total stockholders' equity 1,332 15,603
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $333,882 $318,025
DATASOURCE: Centerplate, Inc.
CONTACT: Gael Doar, Director of Communications of Centerplate, +1-203-975-5941, or Web site: http://www.centerplate.com/
|