STAMFORD, Conn., Aug. 6 /PRNewswire-FirstCall/ -- 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 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 ========== ========== DATASOURCE: Centerplate, Inc.
CONTACT: Gael Doar, Director of Communications, Centerplate, Inc.,
+1-203-975-5941, Web site: http://www.centerplate.com/
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