Stock to Keep Your Eyes on: Isle of Capri Casinos, Inc. (NASDAQ:ISLE)

Isle of Capri Casinos, Inc. (NASDAQ:ISLE) reported earnings for the three months ended April 2016 on June 14, 2016. The company earned $0.62 per share on revenue of $264.87M. Analysts had been modeling earning per share of $0.54 with $266.77M in revenue.

Isle of Capri Casinos, Inc. (NASDAQ:ISLE) reported financial results for the fourth quarter and fiscal year ended April 24, 2016 and other Company-related news.

Fiscal 2016 Fourth Quarter and Fiscal Year 2016 Highlights

  • Diluted net income per share from continuing operations increased to $0.60 per share from $0.08 in the prior year quarter.
  • Eight of 13 properties reported higher year-over-year Adjusted EBITDA in the fourth quarter driven by continued strong performance at our Missouri properties.
  • Adjusted EBITDA increased $0.4 million, to $65.8 million in the quarter compared to the prior year quarter while Adjusted EBITDA margin increased 57 bps, to 24.9%.
  • Fiscal 2016 Adjusted EBITDA increased 5.0% year over year and Adjusted EBITDA margin increased 100 bps, to 21.6%.
  • Our balance sheet continues to get stronger as debt to Adjusted EBITDA ratio was 4.4x at the end of fiscal 2016 compared to 4.9x a year ago.

Financial Highlights

Net revenues for the current quarter were $264.9 million compared to $269.3 million in the prior year quarter, down 1.6%.  Seven of 13 properties reported higher net revenues for the quarter.

Consolidated Adjusted EBITDA was $65.8 million for the quarter compared to $65.4 million in the prior year quarter, up 0.7%.  Consolidated Adjusted EBITDA margins improved to 24.9% from 24.3%.  Operating income increased to $43.2 million from $35.9 million in the prior year quarter.

Interest expense was $16.7 million compared to $20.8 million in the prior year quarter, as a result of our lower overall debt balance as well as the benefits of refinancing our 7.75% Senior Notes due 2019 in the first quarter of fiscal 2016.

On a GAAP basis, diluted income per share from continuing operations was $0.60 compared to diluted income per share from continuing operations of $0.08 in the prior year’s quarter.

The following items impacted income from continuing operations during the fourth quarter of fiscal 2015:

  • We recorded a non-cash impairment charge of $9.0 million in fiscal 2015.
  • We recorded a loss on early extinguishment of debt of $13.8 million in fiscal 2015 related to the tender and refinancing of our 7.75% Senior Notes due 2019.

Operating Results

(All comparisons are to the prior year quarter)

Black Hawk – Net revenues decreased $1.4 million, or 4.0%, to $32.4 million and Adjusted EBITDA decreased $0.9 million to $9.2 million, at our two casinos in Black Hawk. The property results were affected by increased competition in the market this year; in particular, the prior year quarter’s results benefited from construction disruption at a nearby property.

Pompano – Net revenues decreased $2.8 million, or 5.2%, to $51.8 million, and Adjusted EBITDA decreased 7.2%, to $13.8 million at Pompano Park.  Continuing from the third quarter, fewer transient customer trips year over year and an increased competitive environment hampered results in the early part of the quarter; however, the property rebounded to prior year levels in April. Despite the decline, Pompano generated the second highest fourth quarter Adjusted EBITDA since the property’s opening in 2007.

Isle of Capri Casinos, Inc. earnings per share showed an increasing trend of 546.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 155%.Analysts project EPS growth over the next 5 years at 4%. It has EPS annual growth over the past 5 fiscal years of 60.6% when sales grew 0.9. It reported -1.6% sales drop, and 684.7% EPS growth in the last quarter.

The stock is trading at $18.43, up 73.54% from 52-week low of $10.62. The stock trades down -14% from its peak of $21.43 and % below the consensus price target of $19.75. Its volume clocked up at 0.27 million shares which is higher than the average volume of 0.24 million shares. Its market capitalization currently stands at $761.90M.

Stock on Trader’s Radar: Broadcom Limited (NASDAQ:AVGO)

Broadcom Limited (NASDAQ:AVGO) reported earnings for the three months ended April 2016 on June 02, 2016. The company earned $2.53 per share on revenue of $3.56B. Analysts had been modeling earning per share of $2.38 with $3.55B in revenue.

Broadcom Limited (NASDAQ:AVGO) reported financial results for the second quarter of its fiscal year 2016, ended May 1, 2016, and provided guidance for the third quarter of its fiscal year 2016.

  • Quarterly GAAP gross margin of 30 percent; Quarterly non-GAAP gross margin from continuing operations of 60 percent
  • Quarterly GAAP diluted loss per share of $3.02; Quarterly non-GAAP diluted earnings per share from continuing operations of $2.53
  • Quarterly interim dividend of 50 cents per share

Second Quarter Fiscal Year 2016 GAAP Results

Net revenue was $3,541 million, an increase of 100 percent from $1,771 million in the previous quarter and an increase of 119 percent from $1,614 million in the same quarter last year.

Gross margin was $1,046 million, or 30 percent of net revenue. This compares with gross margin of $941 million, or 53 percent of net revenue in the prior quarter, and gross margin of $846 million, or 52 percent of net revenue in the same quarter last year.

Operating expenses were $2,047 million. This compares with $466 million in the prior quarter and $428 million for the same quarter last year.

Operating loss was $1,001 million, or 28 percent of net revenue. This compares with operating income of $475 million, or 27 percent of net revenue, in the prior quarter, and $418 million, or 26 percent of net revenue, in the same quarter last year.

Net loss, which includes the impact of discontinued operations, was $1,255 million, or $3.02 per diluted share. This compares with net income of $377 million, or $1.30 per diluted share, for the prior quarter, and $344 million, or $1.21 per diluted share in the same quarter last year.

Net loss attributable to ordinary shares was $1,186 million. Net loss attributable to noncontrolling interest (restricted exchangeable limited partnership units (“REUs”) in the Company’s subsidiary, Broadcom Cayman L.P. (the “Partnership”) was $69 million.

Second Quarter Fiscal Year 2016 Non-GAAP Results From Continuing Operations

The differences between the Company’s GAAP and non-GAAP results are described generally under “Non-GAAP Financial Measures” below, and presented in detail in the financial reconciliation tables attached to this release.

Net revenue from continuing operations was $3,562 million, an increase of 100 percent from $1,782 million in the previous quarter, and an increase of 117 percent from $1,645 million in the same quarter last year.

Gross margin from continuing operations was $2,138 million, or 60 percent of net revenue. This compares with gross margin of $1,089 million, or 61 percent of net revenue, in the prior quarter, and gross margin of $998 million, or 61 percent of net revenue, in the same quarter last year.

Operating income from continuing operations was $1,329 million, or 37 percent of net revenue. This compares with operating income from continuing operations of $783 million, or 44 percent of net revenue, in the prior quarter, and $701 million, or 43 percent of net revenue, in the same quarter last year.

Net income from continuing operations was $1,120 million, or $2.53 per diluted share. This compares with net income of $710 million, or $2.41 per diluted share last quarter, and net income of $620 million, or $2.13 per diluted share, in the same quarter last year.

Broadcom Limited earnings per share showed an increasing trend of 327.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 1296%.Analysts project EPS growth over the next 5 years at 15.83%. It has EPS annual growth over the past 5 fiscal years of 24% when sales grew 26.7. It reported 119.4% sales growth, and -360.1% EPS decline in the last quarter.

The stock is trading at $158.62, up 60.64% from 52-week low of $100. The stock trades down -4.14% from its peak of $166 and % below the consensus price target of $193.31. Its volume clocked up at 2.44 million shares which is lower than the average volume of 2.53 million shares. Its market capitalization currently stands at $61.36B.

Stock on the Move: Layne Christensen Company (NASDAQ:LAYN)

Layne Christensen Company (NASDAQ:LAYN) reported earnings for the three months ended April 2016 on June 06, 2016. The company earned $-0.45 per share on revenue of $159.74M. Analysts had been modeling earning per share of $-0.31 with $160.24M in revenue.

Layne Christensen Company (NASDAQ:LAYN) announced financial and operating results for the fiscal 2017 first quarter (Q1 FY 2017) ended April 30, 2016.

Highlights

  • Reported net loss from continuing operations for Q1 FY 2017 was ($8.8) million, or ($0.45) per share, compared to ($6.6) million, or ($0.34) per share, for Q1 FY 2016. Q1 FY 2016 results included a $4.2 million gain, or $0.22 per share, on extinguishment of debt.
  • Adjusted EBITDA (a non-GAAP financial measure as defined below) was $4.5 million in Q1 FY 2017 compared to $4.8 million in Q1 FY 2016.
  • Consolidated revenues declined 8% to $159.7 million in Q1 FY 2017 from $174.3 million in Q1 FY 2016, largely related to lower activity levels at Mineral Services and Heavy Civil.  Water Resources produced strong revenue growth while Inliner revenues were relatively flat.
  • Unallocated corporate expenses reflected in our Adjusted EBITDA calculation continued to decline, benefiting from Layne’s overall cost reduction efforts, and were $7.0 million in Q1 FY 2017 compared to $9.5 million in Q1 FY 2016.
  • As of April 30, 2016, cash and cash equivalents were $59.8 million, and total debt was $159.9 million.  Total liquidity, which includes availability under Layne’s credit facility and total cash and cash equivalents, was $126.1 million at April 30, 2016, compared to $131.7 million at January 31, 2016.
  • Total backlog was $316.1 million at April 30, 2016 compared to $346.3 million at January 31, 2016 and $380.4 million at April 30, 2015.   The decrease in backlog was primarily within the Heavy Civil division and related to the continuing strategic shift towards more selective opportunities.

CEO Commentary

Michael J. Caliel, President and Chief Executive Officer of Layne, commented, “Our first quarter results reflect our continued progress on several fronts and the challenges we continue to face in the minerals market.  Notably, Inliner delivered another quarter of strong performance driven by improved margins and Water Resources generated top line growth although margins were impacted by some execution issues, including within the energy business, and increased bad debt expense. We continue to make meaningful progress in transforming our Heavy Civil division where we produced positive Adjusted EBITDA for the first time in more than two years.  The ongoing commodity-related headwinds continue to adversely impact our Mineral Services business although we benefitted from improved profitability of our Latin American affiliates.

Layne Christensen Company earnings per share showed an increasing trend of 16.9% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 19%.Analysts project EPS growth over the next 5 years at 3%. It has EPS annual decline over the past 5 fiscal years of -31.2% when sales declined -7.3. It reported -8.4% sales drop, and -33.5% EPS decline in the last quarter.

The stock is trading at $7.17, up 91.2% from 52-week low of $3.75. The stock trades down -31.78% from its peak of $10.51 and % below the consensus price target of $8.94. Its volume clocked up at 0.18 million shares which is higher than the average volume of 0.16 million shares. Its market capitalization currently stands at $140.20M.

Stock on the Move: CarMax Inc. (NYSE:KMX)

CarMax Inc. (NYSE:KMX) reported earnings for the three months ended May 2016 on June 21, 2016. The company earned $0.9 per share on revenue of $4.13B. Analysts had been modeling earning per share of $0.92 with $4.19B in revenue.

CarMax Inc. (NYSE:KMX) reported results for the first quarter ended May 31, 2016.

  • Net sales and operating revenues increased 2.8% to $4.13 billion.
  • Used unit sales in comparable stores increased 0.2%.
  • Total used unit sales rose 4.0%.
  • Total wholesale unit sales increased 1.8%.
  • CarMax Auto Finance (CAF) income declined 7.7% to $100.8 million.
  • Net earnings declined 3.6% to $175.4 million, while net earnings per diluted share rose 4.7% to $0.90.

First Quarter Business Performance Review

Sales. Total used vehicle unit sales grew 4.0% and comparable store used unit sales rose 0.2% versus the prior year’s first quarter. The comparable store sales performance reflected the combination of an improvement in conversion that more than offset a decrease in store traffic. Our sales performance included a reduction in the Tier 3 sales mix to 11.9% of used unit sales from 14.7% in the prior year’s first quarter. Tier 3 sales represent those financed by our Tier 3 third-party finance providers (those to whom we pay a fee) and those in CAF’s Tier 3 loan origination program. For the non-Tier 3 customer base, comparable store used unit sales rose 3.6%.

Wholesale vehicle unit sales grew 1.8% versus the first quarter of fiscal 2016, primarily driven by the growth in our store base.

Other sales and revenues declined 10.9% year-over-year, primarily reflecting a decrease in new vehicle sales (which are now included in other sales and revenues) due to the disposal of two of our four new car franchises during fiscal 2016. Extended protection plan (EPP) revenues increased 6.3%, largely reflecting improved margins and the growth in our used unit sales. Net third-party finance fees improved by 29.8%, primarily due to the reduced proportion of our sales attributable to Tier 3 finance providers.

Gross Profit. Total gross profit increased 5.3% versus last year’s first quarter, to $572.6 million. Used vehicle gross profit rose 4.1%, driven by the 4.0% increase in total used unit sales. Used vehicle gross profit per unit was consistent at $2,202 versus $2,200 in the prior year period. Wholesale vehicle gross profit declined 1.9% versus the prior year’s quarter, as the 1.8% increase in wholesale unit sales was offset by a decrease in wholesale vehicle gross profit per unit to $995 from $1,032. Other gross profit rose 20.9%, primarily reflecting the improvements in EPP revenues and net third-party finance fees. The decrease in new vehicle sales did not significantly affect other gross profit.

SG&A. Compared with the first quarter of fiscal 2016, SG&A expenses increased 8.7% to $380.2 million. The growth primarily reflected the 11% increase in our store base since the beginning of last year’s first quarter (representing the addition of 16 stores), as well as a $7.0 million increase in share-based compensation expense. SG&A per used unit was $2,223 in the current quarter, up $97 year-over-year, of which $36 was attributable to the higher share-based compensation expense.

CarMax Auto Finance.(1) Compared with last year’s first quarter, CAF income declined 7.7% to $100.8 million. The decline was due to an increase in the provision for loan losses and a lower total interest margin percentage, partially offset by the effects of an increase in average managed receivables. The increase in the provision for loan losses reflected the combined effects of: favorable loss experience in the prior year’s quarter, which reduced last year’s provision; some unfavorable loss experience in the current year’s quarter; and the growth in managed receivables. Average managed receivables grew 12.5% to $9.75 billion. The total interest margin, which reflects the spread between interest and fees charged to consumers and our funding costs, declined to 5.9% of average managed receivables from 6.3% in last year’s first quarter. The allowance for loan losses as a percentage of ending managed receivables was 1.05% as of May 31, 2016, compared with 0.94% as of May 31, 2015.

Interest Expense. Interest expense rose to $11.1 million in the first quarter of fiscal 2017 from $7.1 million in the prior year’s quarter. The increase reflected the combination of growth in our finance and capital lease obligations, which resulted from the recent extension of select store leases beyond their original term, as well as higher average outstanding debt levels in fiscal 2017. During the current year’s quarter, we entered into a note purchase agreement to sell $500 million of senior unsecured notes, due in 2023, 2026 and 2028, to investors in a private placement. Of this amount, $300 million was sold during the first quarter and $200 million will be sold in the second quarter. The proceeds of the first quarter sale of notes were primarily used to reduce outstanding revolving credit borrowings.

CarMax Inc. earnings per share showed an increasing trend of 11% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 361%.Analysts project EPS growth over the next 5 years at 14.33%. It has EPS annual growth over the past 5 fiscal years of 12.9% when sales grew 11. It reported 5.5% sales growth, and 6.2% EPS growth in the last quarter.

The stock is trading at $46.98, up 13.89% from 52-week low of $41.25. The stock trades down -32.06% from its peak of $68.99 and % below the consensus price target of $59.25. Its volume clocked up at 3.71 million shares which is higher than the average volume of 2.9 million shares. Its market capitalization currently stands at $9.01B.

Stock in the Spotlight: Krispy Kreme Doughnuts, Inc. (NYSE:KKD)

Krispy Kreme Doughnuts, Inc. (NYSE:KKD) reported earnings for the three months ended April 2016 on May 31, 2016. The company earned $0.25 per share on revenue of $136.48M. Analysts had been modeling earning per share of $0.24 with $137.08M in revenue.

Krispy Kreme Doughnuts, Inc. (NYSE:KKD) reported financial results for the first quarter of fiscal 2017, ended May 1, 2016.

First Quarter Fiscal 2017 Highlights Compared to the Year-Ago Period:

  • Revenues increased 3.0% to $136.5 million from $132.5 million.
  • Domestic systemwide same store sales rose 0.7%, including a 0.7% decrease at Company Stores and 1.6% increase at domestic franchise stores; constant currency international franchise same store sales declined 7.3%.
  • Systemwide store count rose 13.0% from the first quarter of last year to 1,133 shops worldwide.
  • Operating income was $15.9 million compared to $17.3 million, including $0.5 million in impairment and lease termination costs and $1.6 million in employee termination benefits and Merger related costs in the current year period.
  • Net income was $9.4 million ($0.14 per share) compared to $10.7 million ($0.16 per share) in the first quarter last year.
  • Adjusted earnings per share rose to $0.25 per share from $0.24 in the first quarter last year.
  • Cash provided by operating activities was $19.5 million compared to $17.1 million in the first quarter last year.
  • The Company repurchased 2.4 million shares of its common stock for a total cost of $39.6 million under the authorization approved by the Board of Directors and pursuant to a pre-arranged stock trading plan in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and the Company’s policies regarding stock transactions. The settlement of such purchases was $34.2 million during the quarter.

Results for the Quarter Ended May 1, 2016

Consolidated Results

In addition to the results included in the highlights above, direct operating expenses for the first quarter of fiscal 2017 increased to $108.0 million from $103.8 million in the comparable period last year and, as a percentage of total revenues, increased to 79.1% from 78.3%. Direct operating expenses include $1.1 million related to employee termination benefits.

General and administrative expenses were $7.5 million in the first quarter compared to $7.6 million in the same period a year ago. General and administrative expenses in the first quarter of fiscal 2017 include $0.1 million in employee termination benefits and $0.5 million in Merger related costs.

Impairment charges and lease termination costs of $0.5 million in the first quarter of the current year principally relate to the refranchising of certain shop locations which was completed during the second quarter of fiscal 2017.

Segment Results

Revenues at Company Stores increased 3.6% to $94.0 million in the quarter, driven by a 4.7% increase in on-premises sales, which included a 1.8% increase in store operating weeks and 0.7% decrease in same store sales. Sales within the consumer packaged goods category, which represents just under half of the Company Stores segment revenues, increased 2.3% compared to the prior year. Company Stores segment operating income decreased from $7.4 million to $6.0 million in the quarter as a result of the Company Stores contribution margin decreasing from 18.5% to 17.1% and $0.4 million in employee termination benefits. The decrease in contribution margin was primarily due to higher shop labor partially offset by lower commodity costs.

Domestic Franchise revenues increased 11.5% to $4.1 million primarily reflecting higher royalties. Total sales by domestic franchisees rose 6.7%, and same store sales at domestic franchise shops increased 1.6%. The Domestic Franchise segment generated operating income of $2.5 million compared to $2.1 million in the same period last year, and included $0.2 million in employee termination benefits.

Krispy Kreme Doughnuts, Inc. earnings per share showed an increasing trend of 11% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 105%.Analysts project EPS growth over the next 5 years at 20%. It has EPS annual growth over the past 5 fiscal years of 34.8% when sales grew 7.5. It reported 3% sales growth, and -7.4% EPS decline in the last quarter.

The stock is trading at $20.99, up 62.71% from 52-week low of $12.9. The stock trades down -3.49% from its peak of $21.75 and % below the consensus price target of $21.1. Its volume clocked up at 0.58 million shares which is lower than the average volume of 1.46 million shares. Its market capitalization currently stands at $1.28B.

Stock in the Spotlight: Conns Inc. (NASDAQ:CONN)

Conns Inc. (NASDAQ:CONN) reported earnings for the three months ended April 2016 on June 02, 2016. The company earned $-0.31 per share on revenue of $389.11M. Analysts had been modeling earning per share of $0.06 with $392.64M in revenue.

Conns Inc. (NASDAQ:CONN) announced its financial results for the first quarter ended April 30, 2016.

Norm Miller, Conn’s Chairman, Chief Executive Officer and President, commented, “Our results this quarter reflect the transition we are undergoing this year to transform our credit business. We have a strong, differentiated retail model that delivers an excellent value to our customers. Our work the past few years to revitalize our retail operation was highly successful, but changes in the underlying behavior of our customer base exposed the need for increased investment in credit risk management. We are temporarily slowing the pace of growth to allow us to implement strategies to turn around our credit segment’s financial performance. These strategies include investments in our credit risk management team, improvements to our underwriting strategies and reviewing opportunities to increase the yield on the portfolio. It will take several quarters before the benefits of these efforts begin to meaningfully impact our reported results. I am confident we are headed in the right direction, and will end the year better positioned to achieve consistent and predictable earnings growth.

Retail Segment First Quarter Results (on a year-over-year basis unless otherwise noted)

Total retail revenues were $319.0 million for the first quarter of fiscal 2017, an increase of $20.4 million, or 6.8%, primarily a result of new store openings partially offset by a decline in same store sales. Excluding the impact of our April 2015 decision to exit video game products, digital cameras, and certain tablets, same store sales for the quarter decreased 1.3%. Sales growth was also impacted by underwriting changes made in the fourth quarter of fiscal 2016 and in the first quarter of fiscal 2017. Retail segment operating income for the first quarter was $33.7 million, and $34.2 million adjusted to exclude net charges of $0.5 million primarily from legal and professional fees related to securities-related litigation.

The following provides a summary of items impacting the performance of our product categories during the first quarter of fiscal 2017 compared to the prior-year period:

  • Furniture unit volume increased 23.5%, partially offset by a 3.8% decrease in average selling price;
  • Mattress unit volume increased 13.2% and average selling price increased 3.3%;
  • Home appliance unit volume increased 5.4% with average selling price flat. Total sales for refrigeration increased 6.8%, laundry increased 2.6%, and cooking increased 8.5%;
  • Consumer electronic unit volume decreased 10.4%, partially offset by a 4.0% increase in average selling price. Television sales decreased 1.5% as unit volume decreased 8.1%, partially offset by a 7.2% increase in average selling price. Excluding the impact from exiting video game products and digital cameras, consumer electronics same store sales decreased 8.6%;
  • Home office average selling price increased 11.0%, partially offset by a 7.4% decrease in unit volume. Excluding the impact from exiting certain tablets, home office same store sales increased 2.8%; and
  • The increase in repair service agreement commissions was driven by improved program performance resulting in higher retrospective commissions and increased retail sales.

Conns Inc. earnings per share showed a decreasing trend of -45.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 52%.Analysts project EPS growth over the next 5 years at 23%. It has EPS annual growth over the past 5 fiscal years of 87.4% when sales grew 14.8. It reported 6.6% sales growth, and -174.8% EPS decline in the last quarter.

The stock is trading at $8.07, up 6.18% from 52-week low of $7.6. The stock trades down -81.64% from its peak of $43.95 and 63.2% above the consensus price target of $13.17. Its volume clocked up at 0.8 million shares which is lower than the average volume of 0.88 million shares. Its market capitalization currently stands at $248.65M.