Isle of Capri Casinos Reports Results

Isle of Capri Casinos, Inc. (Nasdaq: ISLE) today reported financial results for its third quarter of fiscal 2006 ended January 22, 2006. For the third quarter, the Company reported net income of $4.1 million or $0.13 per diluted common share compared to net income of $3.5 million or $0.11 per diluted common share for the same quarter last year. Included in net income for the quarter ended January 22, 2006, are $3.8 million in net hurricane related pre-tax charges, related to Isle-Biloxi, Isle-Lake Charles, and Pompano Park, and a $2.1 million pre-tax loss on early extinguishment of debt related to Isle-Black Hawk. These two items combined to reduce net income per diluted common share by $0.10. The Company had net revenues of $269.8 million for the quarter ended January 22, 2006, compared to $265.4 million for the same quarter in fiscal 2005, and Adjusted EBITDA(1) of $62.0 million compared to $53.1 million for the same quarter in fiscal 2005.

For the first nine months of fiscal 2006, the Company reported net income of $3.9 million, or $0.12 per diluted common share. Net income for the same period in fiscal 2005 was $14.6 million, or $0.47 per diluted common share. Net revenues for the nine months ended January 22, 2006, were $799.3 million, compared to $811.9 million for the comparable period in the prior year. Adjusted EBITDA(1) in the nine-month period was $157.1 million, compared to $161.7 million for the comparable nine-month period in fiscal 2005.

"I am pleased with the third quarter results particularly because during this quarter most of the short term challenges facing the Company's southern markets have been resolved. I believe the Company is positioned well going forward, as our expansion work continues with projects in Iowa and Missouri, our rebuilding in Mississippi and new development opportunities in Florida and Pennsylvania," according to chairman and chief executive officer, Bernard Goldstein.

Highlights and Updates

* Subsequent to the end of the quarter, the Company entered into an agreement to sell its properties in Bossier City, Louisiana and Vicksburg, Mississippi for $240 million cash. Net proceeds from the sale are expected to be used to fund existing development projects and/or pay down debt. The Company expects to record a gain on this transaction. The closing of the transaction, expected to occur during the summer of 2006, is subject to regulatory and other customary closing conditions.

* Isle-Biloxi reopened on December 26, 2005, following Hurricane Katrina, with 730 slot machines, a live poker room with nine poker tables, 27 table games, three restaurants and 525 hotel rooms. The casino was the first land-based casino to open since the change in Mississippi gaming legislation. Subsequent to the end of the quarter, Isle-Biloxi added an additional 220 slot machines and a European spa.

* The Company signed a joint development agreement with Lemieux Group LP that includes a provision for Isle to fund a $290 million new multi-purpose arena and pursue a gaming license for 3,000 slot machines in Pittsburgh, Pennsylvania. The new multi-purpose arena and gaming facility are part of a larger billion-dollar effort known as Pittsburgh First to redevelop the Lower Hill and Uptown Districts in conjunction with the Pittsburgh Penguins and a development partner. This proposal is one of three applications under consideration by the Pennsylvania Gaming Control Board for a single license with a decision expected by the end of calendar 2006 or early 2007. If the license is granted to the Isle of Capri, the Company anticipates that the construction of the project would begin shortly thereafter with a temporary casino also a possibility.

* Pompano Park Harness Track reopened for live racing on December 2, 2005 following Hurricane Wilma. In early December, the Florida legislature passed legislation to allow 1,500 slot machines at pari-mutuel facilities in Broward County including the Company's Pompano Park Harness Track. The Company has proceeded with the design for the development of an approximately $125 million racino at Pompano Park and further development is awaiting operating rules and regulations from the state and the satisfaction of other contingencies.

* The Company announced plans for an $85 million expansion project at its Kansas City, Missouri property. The expansion project will improve guest traffic patterns and renovate existing gaming space. Exterior plans include a new, updated entryway, exterior facade refinishing, reconfiguration of existing parking, and the addition of 1,000 parking spaces. Plans for the casino interior include expanding and renovating the gaming area including 400 additional slots and adding an entertainment venue to seat at least 1,000 guests, as well as additional food and beverage amenities. The Kansas City expansion project is subject to negotiation of an amended lease and development agreement and receipt of necessary permits and approvals.

* The new 162-room Colorado Central Station Hotel in Black Hawk, Colorado opened on December 24, 2005 ahead of schedule. Colorado Central Station also added a food court with Quizno's, Station Burger and Mexican Grill, as well as approximately 250 additional parking spaces. Construction on the extension of Main Street continues just south of the Isle-Black Hawk connecting to Colorado Route 119 with completion expected in spring 2006.

* The Inn at Isle-Lake Charles reopened in late November and brought the number of rooms at the property back to 493. The Company also opened a new entryway to the Crown gaming vessel.

* The Company announced that it will relocate its corporate headquarters to the St. Louis County municipality of Creve Coeur while maintaining a regional presence in Biloxi, Mississippi. The Company plans to relocate approximately 150 corporate positions. The relocation process will begin in early summer 2006.

"Our new casino in Biloxi is an example of the direction our product is taking. I am proud of our team members in the southern markets for overcoming significant challenges both personally and professionally in order to get our properties open and operating, " according to Timothy Hinkley, president and chief operating officer.

Operational Review of the Third Quarter Fiscal 2006 Compared to the Third Quarter Fiscal 2005

In Mississippi, the Company's four operations accounted for 23.6% of its net revenues. Isle-Biloxi's net revenues were down from the prior year period principally because the casino was closed for the first two months of the quarter. However, Adjusted EBITDA(1) at the property was up significantly over the same quarter in fiscal 2005 due to reduced competition in the market. The Isle-Biloxi recorded an insurance receivable in the third quarter in the amount equal to the operating and incremental expenses incurred until the casino reopened on December 26, 2005. The net effect of this is that Isle-Biloxi reported no Adjusted EBITDA(1) contribution for the period October 24, 2005 through December 25, 2005. Isle-Biloxi will record any income from business interruption proceeds when the insurance carriers have agreed to the amount. Isle-Natchez experienced increases in both net revenues and Adjusted EBITDA(1) primarily resulting from population shifts into its market area. Isle-Vicksburg also showed increases in both net revenues and Adjusted EBITDA(1) as compared to the prior year due to growth in its market area, improved marketing efforts and cost controls. Isle-Lula's net revenues and Adjusted EBITDA(1) both increased due to improved marketing programs and more efficient management of expenses.

In Louisiana, the Company's two properties contributed 25.7% of its net revenues. Isle-Lake Charles experienced an increase in net revenues and Adjusted EBITDA(1) due to growth in the overall market. For the three month period ended January 22, 2006, the Isle-Lake Charles has recorded a $3.3 million expense for estimated property damage, included in the line item Hurricane related charges, net on the income statement, because the Company expects the property damage insurance proceeds to be less than such costs. Isle-Lake Charles will record any income from expected business interruption proceeds when the insurance carriers have agreed to the amount. Isle-Bossier City showed a decrease in net revenues and Adjusted EBITDA(1) due mostly to increased competition from, and expansion of, Native American gaming in Oklahoma.

In Missouri, the Company's two properties contributed 13.9% of its net revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down due to a decreased gaming patron count caused by the completion of competitors' expansion projects in the market. Isle-Boonville's net revenues increased, but Adjusted EBITDA(1) decreased slightly due to construction disruption from the property's new hotel. Construction of the 140-room hotel continues on schedule and is expected to open in the spring of 2006.

In Iowa, the Company's three casinos contributed 17.6% of its net revenues. Both Isle-Bettendorf and Rhythm City-Davenport showed a decline in both net revenues and Adjusted EBITDA(1) due to increased competition from surrounding markets and an increase in marketing spend. Construction continues at the Isle-Bettendorf of a new hotel with additional restaurants. Isle-Marquette showed a slight increase in net revenues and slightly lower Adjusted EBITDA(1). Additionally in Iowa, the Company continues construction on a new casino-hotel project in Waterloo.

In Colorado, the Company's two Black Hawk casino operations contributed 14.2% of its net revenues. The properties saw an increase in net revenues and Adjusted EBITDA(1) due to completion of our expansion projects and the reduction of construction disruption compared to prior year.

In Florida, Pompano Park recorded a $0.5 million expense for estimated property damage, included in the line item Hurricane related charges, net on the income statement, because the Company expects the property damage insurance proceeds to be less than such costs.

Our international operations accounted for approximately 3.2% of our overall revenues. Isle-Our Lucaya experienced increases in net revenues and a positive Adjusted EBITDA(1) compared to a negative Adjusted EBITDA(1) in the prior year, primarily due to closure in the prior year related to hurricanes.