STAMFORD, Conn., Nov. 10 /PRNewswire-FirstCall/ -- Centerplate,
Inc. (Amex: CVP; TSX: CVP.un), today reported financial results for
the third quarter and fiscal year-to-date ended September 30, 2008.
Net sales for the quarter increased $32.7 million, or 13.3%, to
$278.8 million, compared to net sales of $246.1 million for the
third quarter of 2007. The net sales increase for the third quarter
of 2008 was primarily driven by improved Major League Baseball
(MLB) sales of $22.8 million due to the opening of the Washington
Nationals ball park, increased attendance at a number of the
company's MLB facilities, and the 2008 All-Star game which took
place at Yankee Stadium in July. Sales at convention centers
increased $5.1 million due to increased events at some of the
company's major convention centers and the commencement of
operations at the Orange County Convention Center in August 2008.
In addition, National Football League (NFL) sales increased $2.0
million primarily due to the timing of games played during the
quarter versus prior year, and sales at all other facilities
increased $2.8 million. Adjusted earnings before interest, income
taxes, depreciation and amortization (EBITDA) decreased $3.5
million, or 13.4%, to $22.6 million for the third quarter of 2008
compared to $26.1 million in the third quarter of 2007, primarily
due to $2.6 million in transaction costs associated with completing
the merger agreement with Kohlberg & Company. Excluding these
transaction costs, adjusted EBITDA for the third quarter decreased
$0.9 million, or 3.8%, to $25.2 million compared to the third
quarter of 2007. This decline is due to lower spending and higher
labor costs at some convention centers and softness at some sports
facilities driven by the economic downturn, opening expenses at the
Washington Nationals and Orange County Convention Center and higher
commissions at several of the company's facilities. "We continue to
be focused on completing our merger with Kohlberg & Company as
we are confident it will enhance our current partnerships and make
us more competitive in the market," said Janet Steinmayer,
President and Chief Executive Officer of Centerplate. She added,
"Net sales for the quarter increased primarily due to new accounts;
however adjusted EBITDA for the quarter decreased due to opening
expenses incurred at these new accounts, the softening economy,
higher commissions, and transaction costs related to the Company's
merger with Kohlberg & Company." For the thirty-nine weeks
ended September 30, 2008, net sales increased 13.6% to $650.3
million from $572.3 million in the comparable period in 2007.
Adjusted EBITDA for the thirty-nine week period was $40.9 million
compared to $46.8 million in the comparable period in 2007. The
decline was partially due to $4.0 million in legal and transaction
costs associated with the company's exploration of capital
structure and other alternatives, including the merger with
Kohlberg & Company. Excluding these transaction costs, adjusted
EBITDA declined $1.9 million, or 4.1%, due to the softening economy
and opening expenses at several new venues. For the third quarter
of 2008, the company reported a net loss of $24.9 million, or a
loss of $1.19 per share, compared to net income of $6.0 million, or
$0.27 per share, in the third quarter of 2007. The decline in net
income was primarily due to an increase in income tax expense. This
increase was the result of the Company's conclusion that it would
not generate sufficient taxable income in the near future to
realize all of its net deferred tax assets in the United States.
The Company therefore recorded a full valuation allowance against
its net deferred tax assets in the amount of $24.2 million. These
tax assets can be recovered in the future should the Company
generate sufficient taxable income to utilize them. For the
thirty-nine weeks ended September 30, 2008, the company reported a
net loss of $33.6 million or a loss of $1.60 per share compared to
income of $0.2 million in the prior year period or $0.01 per share.
This decline was primarily due to an increase in income tax expense
as explained above. In light of the company's pending transaction
with Kohlberg, the company will not hold a conference call to
discuss the third quarter results. Additional information about the
quarter will be available in the company's Form 10-Q which is being
filed with the United States Securities and Exchange Commission
later today, Monday, November 10, 2008. 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
contemplated merger agreement, consumer spending levels, changing
trends in its business and competitive environment, adverse weather
conditions and other factors, as well as the risks identified in
its 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
Thirty-nine Weeks Ended September 30, October 2, September 30,
October 2, 2008 2007 2008 2007 ------------- ----------
------------- ----------- (In thousands, except share data) Net
sales $278,773 $246,141 $650,289 $572,313 Cost of sales 229,093
197,357 539,384 466,563 Selling, general and administrative expense
27,102 23,112 70,371 60,473 Depreciation and amortization 9,599
7,995 26,727 23,090 Transaction related expenses - 667 - 1,000
Trademark impairment 3,623 - 3,623 - ------------- ----------
------------- ----------- Income from operations 9,356 17,010
10,184 21,187 ------------- ---------- ------------- -----------
Interest expense, net 7,919 7,329 24,611 22,460 Other income, net
(55) (470) (339) (1,514) ------------- ---------- -------------
----------- Income (loss) before income taxes 1,492 10,151 (14,088)
241 Income tax provision 26,413 4,155 19,465 53 -------------
---------- ------------- ----------- Net income (loss) $(24,921)
$5,996 $(33,553) $188 ============= ========== =============
=========== Basic and diluted net income (loss) per share with and
without conversion option $(1.19) $0.27 $(1.60) $0.01 =============
========== ============= =========== 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
$- $0.20 $0.26 $0.59 ============= ========== =============
=========== CENTERPLATE, INC. RECONCILIATION OF NET INCOME (LOSS)
TO ADJUSTED EARNINGS BEFORE INTEREST, INCOME TAXES, DEPRECIATION,
AND AMORTIZATION (UNAUDITED) Thirteen Weeks Ended Thirty-nine Weeks
Ended September 30, October 2, September 30, October 2, 2008 2007
2008 2007 ------------- ---------- ------------- ---------- (In
thousands) Net income (loss) $(24,921) $5,996 $(33,553) $188 Income
tax provision 26,413 4,155 19,465 53 ------------- ----------
------------- ---------- Income (loss) before income taxes 1,492
10,151 (14,088) 241 Adjustments: Interest expense 7,919 7,329
24,611 22,460 Depreciation and amortization 9,599 7,995 26,727
23,090 ------------- ---------- ------------- ---------- EBITDA (1)
$19,010 $25,475 $37,250 $45,791 ============= ==========
============= ========== The following adjustments to EBITDA were
made to compute Adjusted EBITDA: EBITDA $19,010 $25,475 $37,250
$45,791 Adjustments: Transaction related expenses (2) - 667 - 1,000
Trademark impairment (3) 3,623 - 3,623 - ------------- ----------
------------- ---------- Adjusted EBITDA (1) $22,633 $26,142
$40,873 $46,791 ============= ========== ============= ==========
(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 payments. (2) Reflects expenses associated with the 2007
follow-on offering to the Company's 2003 initial public offering.
(3) Reflects a non-cash expense for the write down of trademarks as
a result of the determination that an impairment was incurred
during the thirteen weeks ended September 30, 2008. CENTERPLATE,
INC. SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED) Thirteen
Weeks Ended Thirty-nine Weeks Ended September 30, October 2,
September 30, October 2, 2008 2007 2008 2007 -------------
---------- ------------- ---------- (In thousands) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(24,921)
$5,996 $(33,553) $188 Adjustments to reconcile net income (loss) to
net cash provided by operating activities: Depreciation and
amortization 9,599 7,995 26,727 23,090 Amortization of deferred
financing costs 990 643 2,960 1,927 Change in fair value of
derivative - 250 (311) 368 Interest earned on restricted cash -
(118) (111) (350) Charge for impaired assets 3,623 - 3,623 -
Deferred tax change 26,713 4,241 19,724 256 Gain (loss) on
disposition of assets (96) - (98) (26) Other 17 (5) (13) - Changes
in assets and liabilities 11,049 (5,565) 30,463 4,709 -------------
---------- ------------- ---------- Net cash provided by operating
activities 26,974 13,437 49,411 30,162 ------------- ----------
------------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business - - (1,000) - Purchase of property and
equipment (5,938) (4,139) (14,061) (12,249) Proceeds from sale of
property and equipment 251 - 309 17 Contract rights acquired
(2,819) (6,937) (15,497) (10,980) Restricted cash - 5,809 354 6,658
------------- ---------- ------------- ---------- Net cash used in
investing activities (8,506) (5,267) (29,895) (16,554)
------------- ---------- ------------- ---------- CASH FLOWS FROM
FINANCING ACTIVITIES: Restricted Cash - - 8,033 - Repayments -
revolving loans (22,000) (24,500) (64,500) (65,500) Borrowings -
revolving loans (5,500) 17,000 57,000 55,500 Net borrowings -
swingline loans - - (4,000) - Principal payments on long-term debt
- (269) (8,840) (807) Dividend payments - (4,460) (6,925) (13,380)
Increase in bank overdrafts 2,421 3,391 4,707 4,733 -------------
---------- ------------- ---------- Net cash used in financing
activities (25,079) (8,838) (14,525) (19,454) -------------
---------- ------------- ---------- Effect of exchange rate on cash
(198) 453 (438) 453 DECREASE (INCREASE) IN CASH (6,809) (215) 4,553
(5,393) CASH AND CASH EQUIVALENTS: Beginning of period 45,215
34,413 33,853 39,591 ------------- ---------- -------------
---------- End of period $38,406 $34,198 $38,406 $34,198
============= ========== ============= ========== CENTERPLATE, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED) September 30,
January 1, 2008 2008 ------------- ---------- ASSETS (in thousands)
Current assets $109,737 $95,517 Property and equipment, net 54,713
51,986 Contract rights, net 92,805 85,183 Cost in excess of net
assets acquired 41,142 41,142 Deferred financing costs, net 11,388
10,361 Other assets 20,847 48,162 ------------- ---------- TOTAL
ASSETS $330,632 $332,351 ============= ========== LIABILITIES AND
STOCKHOLDERS' DEFICIENCY Current liabilities $366,287 $114,992
Long-term debt 0 223,334 Other liabilities 21,499 11,559 Total
stockholders' deficiency (57,154) (17,534) ------------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $330,632 $332,351
============= ========== DATASOURCE: Centerplate, Inc. CONTACT:
Gael Doar, Director of Communications of Centerplate, Inc.,
+1-203-975-5941, Web site: http://www.centerplate.com/
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