Centerplate Reports 2007 Second Quarter Results



    STAMFORD, Conn., Aug. 8 /CNW/ -- Centerplate, Inc. (Amex:   CVP; TSX:
CVP.un), today reported financial results for the second quarter and fiscal
year-to-date ended July 3, 2007.  Net sales in the quarter increased by $10.1
million, or approximately 5.3%, to $200.8 million, compared to net sales of
$190.7 million for the second quarter of 2006.  Adjusted earnings before
interest, income taxes, depreciation and amortization (EBITDA) decreased $1.2
million, or approximately 6.1%, to $18.3 million for the second quarter of
2007 compared to $19.5 million in the second quarter of 2006, primarily due to
the timing of new versus closed accounts, higher product costs and higher
selling, general and administrative (SG&A) costs.
    During the quarter, Major League Baseball (MLB) sales improved $4.5
million compared to the second quarter of 2006, primarily due to an increase
in attendance and per capita spending at a number of MLB facilities.  Sales at
the company's minor league baseball facilities were up $2.6 million mainly
because of 19 additional games.  Sales at convention centers increased $2.5
million due to a number of larger events at some of the company's facilities.
Sales at our National Football League (NFL) facilities increased $1.7 million
due to the reopening of the Louisiana Superdome which was closed for
renovations during the prior year period.  Sales at the company's new accounts
(one new spring training facility and four minor league baseball parks) were
approximately $3.5 million; this was offset by a decline of $3.7 million due
to the termination of some of the company's contracts.
    "We are pleased with the increase in net sales in the second quarter. 
The decline in adjusted EBITDA was in line with expectations although it was
impacted more by product costs and higher overhead expenses as a result of our
efforts to retool the company for long-term growth," said Janet L. Steinmayer,
President and Chief Executive Officer of Centerplate.  She added, "We continue
to believe that 2007 will be as good a year, or better, than 2006."
    For the twenty-six weeks ended July 3, 2007, net sales increased $22.0
million, or approximately 7.2%, to $326.2 million, from $304.2 million during
the comparable period in 2006.  Adjusted EBITDA for the twenty-six week period
decreased $2.3 million, or approximately 10.0%, to $20.6 million in 2007 from
$22.9 million in 2006.  The decline in adjusted EBITDA was driven by the
timing of events and closed versus new accounts, higher product costs and
overhead expenses.
    For the second quarter of 2007, the company reported net income of $2.2
million, or $0.10 per share, compared to a loss of $0.1 million, or $0.00 per
share, in the second quarter of 2006.  The improvement in net income this
quarter was due to a difference between the tax provision in the second
quarter of 2006 compared to the second quarter of 2007.  For the twenty-six
weeks ended July 3, 2007, the company reported a net loss of $5.8 million
compared to a loss of $5.7 million in the prior year period.  The year over
year decline was driven by lower operating income and higher interest expense
driven by increased borrowing, higher interest rates and the change in the
fair market value of the company's derivatives.  On a per share basis, for the
twenty-six week period, Centerplate reported a net loss of $0.26 compared to a
net loss of $0.25 per share for the comparable period in 2006.
    As previously announced, Centerplate will make its 44th consecutive
monthly distribution to IDS holders on August 20, 2007 at the anticipated
annual rate of approximately $1.56 per IDS.
    Centerplate will discuss its second quarter 2007 financial results on a
conference call today, Wednesday, August 8 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
8, 2007 through midnight on August 22, 2007.  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 250026.
    
    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 125 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, consumer spending levels, changing trends in our business
and competitive environment, adverse weather conditions and other factors, as
well as the risks identified in 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)
    

    
                                    13 Weeks Ended          26 Weeks Ended
                                  July 3,     July 4,     July 3,     July 4,
                                   2007        2006        2007        2006
                                       (In thousands, except share data)
    

    Net sales                    $200,839    $190,699    $326,172    $304,204

    
    Cost of sales (excluding
     depreciation and
     amortization)                162,948     154,174     269,206     249,834
    Selling, general and
     administrative                20,161      17,413      37,361      32,096
    Depreciation and
     amortization                   7,713       7,074      15,095      14,125
    Transaction related
     expenses                         333         -           333         -
    Contract related losses           -           -           -           100
    

    Operating income                9,684      12,038       4,177       8,049

    Interest expense                7,079       6,207      15,131      12,746

    Other income                     (542)       (341)     (1,044)      
(663)

    
    Income (loss) before
     income taxes                   3,147       6,172     (9,910)     (4,034)
    

    
    Income tax provision
     (benefit)                        907       6,238      (4,102)      1,630
    Net income (loss)              $2,240        $(66)    $(5,808)    $(5,664)
    

    
    Basic and diluted net loss
     per share with and
     without conversion option      $0.10      $(0.00)     $(0.26)     $(0.25)
    

    
    Weighted average shares
     outstanding with
     conversion option          4,060,997   4,060,997   4,060,997   4,060,997
    Weighted average shares
     outstanding without
     conversion option         18,463,995  18,463,995  18,463,995  18,463,995
    Total weighted average
     shares outstanding        22,524,992  22,524,992  22,524,992  22,524,992
    

    
    Dividends declared per
     share                          $0.20       $0.20       $0.40       $0.40
    



    
                                CENTERPLATE, INC.
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS BEFORE INTEREST,
                 INCOME TAXES, DEPRECIATION, AND AMORTIZATION (UNAUDITED)
    

    
                                             13 Weeks Ended    26 Weeks Ended
                                            July 3,  July 4,  July 3,  July 4,
                                             2007     2006     2007     2006
                                                     (In thousands)
    Net income (loss)                       $2,240     $(66) $(5,808) $(5,664)
    Income tax provision (benefit)             907    6,238   (4,102)   1,630
    Income (loss) before income taxes        3,147    6,172   (9,910)  (4,034)
    Adjustments:
    Interest expense                         7,079    6,207   15,131   12,746
    Depreciation and amortization            7,713    7,074   15,095   14,125
    EBITDA (1)                             $17,939  $19,453  $20,316  $22,837
    


    
    The following adjustments to EBITDA
     were made to compute Adjusted EBITDA:
    

    
    EBITDA                                 $17,939  $19,453  $20,316  $22,837
    Adjustments:
    Transaction related expenses (2)           333      -        333      -
    Contract related losses (3)                -        -        -        100
    Adjusted EBITDA (1)                    $18,272  $19,453  $20,649  $22,937
    


    
    (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 expenses incurred in connection with the follow-on offering
        to the Company's 2003 initial public offering.
    (3) Reflects non-cash expense for the write-off of impaired assets
        associated with the Company's contracts.
    



    
                                CENTERPLATE, INC.
                 SELECTED CONSOLIDATED CASH FLOW DATA (UNAUDITED)
    

    
                                            Thirteen Weeks   Twenty-six Weeks
                                                Ended             Ended
                                            July 3,  July 4,  July 3,  July 4,
                                             2007     2006     2007     2006
                                                      (In thousands)
         CASH FLOWS FROM OPERATING
          ACTIVITIES:
         Net income (loss)                  $2,240     $(66) $(5,808) $(5,664)
         Adjustments to reconcile net
          income (loss) to net cash
          provided by
          operating activities:
             Depreciation and amortization   7,713    7,074   15,095   14,125
             Amortization of deferred
              financing costs                  642      642    1,284    1,285
             Non-cash interest earned on
              restricted cash                 (117)    (104)    (232)    (198)
             Derivative non-cash interest     (554)    (534)     118     (932)
             Contract related losses           -        -        -        100
             Deferred tax change               749    6,207   (3,985)   1,515
             Gain (loss) on disposition of
              assets                           (26)     (18)     (26)     (31)
             Other                             636      308      710      313
    

    
            Changes in assets and
             liabilities                    14,768   19,141    9,569   20,575
    

    
                 Net cash provided by
                  operating activities      26,051   32,650   16,725   31,088
    

    
         CASH FLOWS FROM INVESTING
          ACTIVITIES:
            Purchase of property and
             equipment                      (4,804)  (3,598)  (8,110)  (4,833)
            Proceeds from sale of property
             and equipment                      15      148       17      165
            Contract rights acquired        (1,646)  (3,600)  (4,043)  (6,818)
            Return of unamortized capital
             investment                        -      1,828      -      1,828
            Restricted cash                    391      -        849      -
    

    
                 Net cash used in
                  investing activities      (6,044)  (5,222) (11,287)  (9,658)
    

    
         CASH FLOWS FROM FINANCING
          ACTIVITIES:
            Repayments - revolving loans   (30,000)  (5,000) (41,000)  (5,000)
            Borrowings - revolving loans    15,000    4,000   38,500    5,000
            Net Borrowings - swingline
             loans                          (4,000)     -        -        -
            Principal payments on long-
             term debt                        (269)    (269)    (538)    (538)
            Payment of financing costs         -        -        -        -
            Dividend payments               (4,460)  (4,460)  (8,920)  (8,920)
            Increase (decrease) in bank
             overdrafts                      5,180    1,950    1,342    1,716
    

    
                 Net cash provided by
                  (used in) financing
                  activities               (18,549)  (3,779) (10,616)  (7,742)
    

    INCREASE (DECREASE) IN CASH         1,458   23,649   (5,178)  13,688

    
         CASH AND CASH EQUIVALENTS:
         Beginning of period                32,955   31,449   39,591   41,410
    

    End of period                     $34,413  $55,098  $34,413  $55,098



    
                                  CENTERPLATE, INC.
               SELECTED CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)
    

    
                                           July 3,   January 2,
                                            2007        2007
    ASSETS                                   (in thousands)
      Current assets                      $108,433   $102,194
      Property and equipment, net           52,640     50,684
      Contract rights, net                  78,479     79,209
      Cost in excess of net assets
       acquired                             41,142     41,142
      Deferred financing costs, net         11,646     12,930
      Other assets                          47,997     46,211
    TOTAL ASSETS                          $340,337   $332,370
    

    
    LIABILITIES AND STOCKHOLDERS' EQUITY
     (DEFICIENCY)
      Current liabilities                 $121,528    $98,700
      Long-term debt                       209,251    209,789
      Other liabilities                      8,553      8,279
    

    
      Common Stock with conversion
       option, par value $0.01,
       exchangeable for subordinated
       debt, net of discount                14,352     14,352
    

    
      Total stockholders' equity
       (deficiency)                        (13,347)     1,250
    TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY (DEFICIENCY)                  $340,337   $332,370
    




For further information:

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

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CENTERPLATE, INC.

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