SPARTANBURG, S.C., May 3 /PRNewswire-FirstCall/ -- Centerplate, Inc. (AMEX:CVP) (TSX: CVP.un), today reported financial results for the first quarter ended April 4, 2006. Net sales increased by $6.3 million, or almost 6%, to $113.5 million, compared to net sales of $107.2 million for the first quarter of 2005. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) for the first quarter were $3.5 million, compared to $2.5 million in the first quarter of 2005.
Net sales for the first quarter 2006 increased primarily due to higher sales at the company's convention centers and arenas ($7.1 million and $6.5 million, respectively). The improvement at convention centers was partially due to an increase in the number of events. Increases at the company's arenas stemmed from the resolution of the National Hockey League (NHL) lock-out and the Atlantic Coast Conference (ACC) and National Collegiate Athletic Association (NCAA) basketball tournaments held in a number of the company's facilities. Partially offsetting these improvements was a decline in sales of $5.6 million at the company's National Football League (NFL) facilities. Four fewer NFL games were played in the first quarter of 2006, compared to the first quarter of 2005, because of variations in NFL schedules. In addition, the Louisiana Superdome was closed and the New Orleans Arena was open on a limited basis in the wake of Hurricane Katrina, causing a $3.5 million decline in sales.
"We are very pleased with our first quarter results," said Janet L. Steinmayer, President and Chief Executive Officer of Centerplate. She added, "Our focus in 2006 is to continue to execute on our strategic initiatives -- Culinary Excellence, Branded Concepts, Speed of Service and Design -- while keeping our overhead expenses flat as compared to last year. This quarter's strong results demonstrate that we are on the right track." The company reported a net loss of $5.6 million, or $0.25 per share, compared to a net loss of $4.4 million, or $0.20 per share, in the first quarter of 2005. The increased loss was primarily due to higher interest expense under the April 1, 2005 credit agreement.
As previously announced, Centerplate will make its 29th monthly distribution to IDS holders on May 19, 2006 at the anticipated annual rate of approximately $1.56 per IDS.
Centerplate will discuss its first quarter 2006 financial results on a conference call today, Wednesday, May 3 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 May 3, 2006 through midnight on May 23, 2006. The replay can be accessed domestically by dialing 877-660-6853. For international callers, the dial-in number is 201-612-7415. The replay account number for the call is 252 and the pass code is 200526.
About Centerplate Centerplate is a leading provider of food and related services, including concessions, catering, merchandise and facility management services, at 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 The information contained in this news release, other than historical information, 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 such forward-looking statements are reasonable, the company can give no assurance that such 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 the prospectus, relating to the offering of IDSs, and 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.
(Financial Tables Follow) CENTERPLATE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Thirteen Weeks Ended
April 4, March 29,
2006 2005
(In thousands, except share data)
Net sales $113,505 $107,220 Cost of sales 95,660 89,031
Selling, general and administrative expense 14,683 15,766
Depreciation and amortization 7,051 6,805
Contract related losses 100 - Operating loss (3,989) (4,382) Interest expense, net 6,539 5,400 Other income, net (322) (86) Loss before income taxes (10,206) (9,696) Income tax benefit (4,608) (5,263) Net loss $(5,598) $(4,433) Basic and Diluted Net Loss
per share with and without
conversion option $(0.25) $(0.20) Weighted average shares outstanding
with conversion option 4,060,997 4,060,997
Weighted average shares outstanding
without conversion option 18,463,995 18,463,995
Total weighted average shares
outstanding 22,524,992 22,524,992 Dividends declared per share $0.20 $0.20 CENTERPLATE, INC. RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS BEFORE INTEREST,
INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED) Thirteen Weeks Ended
April 4, March 29,
2006 2005
(In thousands)
Net loss $(5,598) $(4,433)
Income tax benefit (4,608) (5,263)
Loss before income taxes (10,206) (9,696)
Adjustments:
Interest expense 6,539 5,400
Depreciation and amortization 7,051 6,805
EBITDA (1) $3,384 $2,509
The following adjustments to EBITDA
were made to compute Adjusted EBITDA: EBITDA $3,384 $2,509
Adjustments:
Contract related losses (2) 100 -
Adjusted EBITDA (1) $3,484 $2,509
(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. (2) 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 Ended
April 4, March 29,
2006 2005
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,598) $(4,433)
Adjustments to reconcile net
income (loss) to net cash used in
operating activities:
Depreciation and amortization 7,051 6,805
Amortization of deferred
financing costs 643 382
Contract related losses 100 -
Noncash interest earned on
restricted cash (94) -
Derivative noncash interest (398) (105)
Deferred tax change (4,692) (5,263)
Loss on disposition of assets (13) (1)
Other 5 (67) Changes in assets and liabilities 1,434 (739) Net cash used in
operating activities (1,562) (3,421) CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,235) (3,532)
Proceeds from sale of
property and equipment 17 329
Contract rights acquired (3,218) (4,644)
Restricted cash - (180) Net cash used in
investing activities (4,436) (8,027) CASH FLOWS FROM FINANCING
ACTIVITIES:
Net borrowings - revolving loans 1,000 18,750
Principal payments on long-
term debt (269) -
Payments of financing costs - (791)
Dividend payments (4,460) (4,460)
Decrease in bank overdrafts (234) (1,693) Net cash provided by
(used in) financing activities (3,963) 11,806 INCREASE (DECREASE) IN CASH (9,961) 358 CASH AND CASH EQUIVALENTS:
Beginning of period 41,410 24,777 End of period $31,449 $25,135 CENTERPLATE, INC. SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED) April 4, January 3,
2006 2006
ASSETS (In thousands)
Current assets $85,109 $88,790
Property and equipment, net 47,646 49,725
Contract rights, net 79,776 80,557
Cost in excess of net assets
acquired 41,142 41,142
Deferred financing costs, net 14,856 15,499
Other assets 47,689 42,312
TOTAL ASSETS $316,218 $318,025 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $79,023 $70,822
Long-term debt 210,595 210,864
Other liabilities 6,698 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 5,550 15,603
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $316,218 $318,025
DATASOURCE: Centerplate, Inc.
CONTACT: Gael Doar, Director of Communications of Centerplate, Inc., +1-203-975-5941, or Web site: http://www.centerplate.com/
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