Centerplate Reports 2008 Second Quarter Results



    STAMFORD, Conn., Aug. 6 /CNW/ -- 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 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 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
    gael.doar@centerplate.com
    



    
                                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
                                             ==========     ==========

    




For further information:

For further information: Gael Doar, Director of Communications,
Centerplate, Inc., +1-203-975-5941, gael.doar@centerplate.com Web Site:
http://www.centerplate.com/

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