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Isle of Capri Casinos Reports Results

For the fourth fiscal quarter, the company reported income from continuing operations of $7.1 million or $0.22 per diluted common share compared to a loss from continuing operations of $4.7 million or $0.15 per diluted common share for the same quarter last year. The company reported a loss from discontinued operations of $3.6 million primarily related to the goodwill impairment recorded in the fourth fiscal quarter related to the sale of the Colorado Grande-Cripple Creek, which was completed on April 25, 2005, as compared to income of $0.3 million in fourth fiscal quarter 2004. Net income for the fourth fiscal quarter was $3.5 million compared to a net loss of $4.3 million of the same quarter last year. Net revenues for the fourth fiscal quarter were $299.7 million compared to $290.9 million for the same period in fiscal 2004. Adjusted EBITDA(1) for the fourth fiscal quarter was $62.4 million compared to $65.9 million for the same period in fiscal 2004.

"We are coming close to completing most of the expansion projects at our core properties. These properties have seen a great deal of change and development over the last year and quarter marking this as a period of transition at the Isle," Bernard Goldstein, Isle of Capri Casinos, Inc. chairman and chief executive officer, said.

During the fourth fiscal quarter and year ended April 24, 2005, the company incurred a loss on early extinguishment of debt in connection with the refinancing of its $500.0 million senior secured credit facility. The company also recorded a valuation charge related to the Rosemont, Illinois license and a gain for selling an option in St. Louis, Missouri as well as preopening expenses related to the Blue Chip-Walsall property opening. The following table reflects comparable net income adjusted for these items:

                                    Three Months Ended     Fiscal Year Ended
                                    April 24, April 25,   April 24, April 25,
                                      2005      2004        2005      2004
                                                 (In thousands)
    Net income (loss), as reported    $3,451   $(4,346)    $18,038   $27,749
    Add/(deduct):
        Loss (income) from
         discontinued operations
          net of income taxes (13)     3,607      (310)      2,946    (1,418)
         Loss on early
          extinguishment of debt,
           net of income taxes (11)    3,046    15,140       3,046    15,140
         Other charges, net of
          income taxes (6) (7)           138        --       1,078        --
         Preopening, net of income
          taxes (5)                       --       243         143     1,432
    Adjusted net income              $10,242   $10,727     $25,251   $42,903

    Adjusted earnings per diluted
     common share                      $0.33     $0.34       $0.82     $1.39

    Adjusted weighted average
     common shares, assuming
      dilution                        31,391    31,150      30,930    30,841


    

Highlights:

* The company signed a development agreement with the City of Bettendorf pursuant to which the company will construct a new 250-room Isle hotel, additional parking, a Kitt's Kitchen restaurant, expansion of the existing buffet, and the City will construct a 50,000 square foot convention center adjacent to the company's facility that will be managed by the Isle- Bettendorf. The cost of the company's portion of this project will be approximately $45.0 million, and the new hotel is scheduled to

open in the late spring of 2007. * The company has been selected by the Iowa Racing and Gaming Commission as the successful applicant for a gaming license in Waterloo, Iowa. The company plans to spend approximately $119.0 million on constructing a 35,000 square foot single level casino with 1,300 gaming positions, three of its signature restaurants, a 200-room hotel and 1,000 parking spaces. The company expects the construction of the project to take approximately 24 months including the acquisition of necessary permits and licenses.

* In May 2005, the company signed an agreement with resort developer Eighth Wonder to manage the casino and related operations included in Eighth Wonder's proposal for a new integrated resort complex in Singapore should Eighth Wonder be selected to develop such complex. The proposal is expected to be submitted in early calendar 2006.

* The company expects to complete the new 400-room hotel expansion at the Isle-Biloxi by mid-summer and expects to open a spa in early fall of 2005. The company's new casino is currently under construction offsite and will feature significantly expanded gaming space, new entertainment venues, restaurants and other amenities. The company plans to close the existing casino for approximately two weeks between Thanksgiving and Christmas of 2005 while it moves the new facility into place.

* Both the Isle-Black Hawk's and the Colorado Central Station-Black Hawk's casino expansions opened this quarter marking a milestone in the $94.0 million construction and renovation project currently underway. In mid-June, additional parking, a new Kitt's Kitchen restaurant and the sky bridges connecting the Isle-Black Hawk and the Colorado Central Station-Black Hawk also were completed.

* Isle-Boonville has begun construction on the previously announced 140- room hotel, which will include 20 suites and a 6,000 square foot event center. The project is expected to be completed in late spring of 2006 at a cost of approximately $17.5 million.

* The company continues to deploy the IGT Advantage(TM) Casino System to replace the existing systems in six of its casinos. The company began the rollout of this system at the Colorado Central Station-Black Hawk, the Isle- Biloxi and the Isle-Vicksburg. Upon completion at these casinos, the company will rollout the system at the Isle-Lula, the Isle-Natchez and one other location yet to be determined. After implementation, these properties will feature the NexGen(TM) Interactive Display, supporting loyalty-building Bonusing(TM) tools, which will allow the company to enhance its uniquely branded marketing programs.

* During the fourth fiscal quarter, the company refinanced its senior secured credit facility. The company now has a term loan of $250.0 million with an additional $50.0 million delayed draw term loan available until August 3, 2005, and an undrawn revolving credit line of $400.0 million. The covenants associated with the credit facility provide more flexibility as the company continues to pursue its development goals. The company incurred a pre-tax loss from early extinguishment of debt of $5.3 million.

Timothy Hinkley, Isle of Capri Casinos, Inc. president and chief operating officer, said: "This past quarter we continued to stay focused on our long term goals of enhancing and expanding our core properties and delivering to our customers a state-of-the-art gaming experience. We are looking forward to taking advantage of our newly expanded and enhanced product offerings in the coming year."

Updates

* In November 2004, voters in the State of Florida voted to amend the state's constitution to allow the voters of Miami-Dade and Broward counties (Broward County is the location of the Pompano Park Racetrack) to decide whether to approve slot machines in racetracks and jai alai frontons in their respective counties. Broward county voters passed their local referendum and Dade county voters rejected their referendum in March 2005. Enabling gaming legislation was not passed in the current session of the Florida legislature despite the constitutional requirement that such legislation be in effect by July 1, 2005. The company and the other Broward county pari-mutuels filed a lawsuit seeking authority to proceed with the development of slot machine facilities without the enabling legislation. On June 21, 2005, the Circuit Court judge issued a decision in favor of pari-mutuel facilities. However, the regulation and timing of installation and operation of the slot machines has not been finally determined.

* During the fourth fiscal quarter, the governor of Illinois appointed a new gaming board. For the past approximately seven months, the gaming board could take no action since there was no quorum. One of the first acts by the new gaming board was to authorize the reinstatement of the proceeding to revoke the license previously granted to Emerald Casino Inc. Due to the continuing uncertainty with respect to this matter, the company recorded a valuation charge for the full amount of its $2.5 million investment in the license.

* The company sold an option that it had previously acquired related to the purchase of real estate in St. Louis, Missouri; and accordingly, recorded a gain of $2.3 million during the fourth fiscal quarter.

* The company remains committed to its development project in the United Kingdom to build a casino in Coventry; however, legislation enacted in April 2005 limits the number of regional casinos to one. This may be increased. The Isle has obtained all necessary gaming licenses to open a casino at the RICOH(TM) Arena Coventry in the summer of 2006 under the Gaming Act of 1968. The company believes it is well positioned to develop a regional casino in Coventry should it be awarded the one regional casino license.

Operational Review of the Fourth Quarter Fiscal 2005 Compared to the Fourth Quarter Fiscal 2004 In Mississippi, the company's four operations contributed 24% of its net revenues. Isle-Biloxi's net revenues were up minimally and Adjusted EBITDA(1) decreased due to increased land rent and additional maintenance during the construction period. The company expects to have the new hotel completed and opened by mid-summer 2005. Isle-Natchez experienced an increase in net revenues and Adjusted EBITDA(1) driven by increased marketing efforts in its outer markets. Isle-Vicksburg showed a decline in net revenues due to competitive pressures and Adjusted EBITDA(1) primarily due to increased marketing and employee benefit costs. Despite continuing to face a very competitive and contracting market, the Isle-Lula showed a slight increase in net revenues and Adjusted EBITDA(1) remained flat.

In Louisiana, the company's two properties contributed 24% of its net revenues. Isle-Lake Charles experienced a slight decrease in net revenues due to lower table hold but showed an increase in Adjusted EBITDA(1) due to an improvement in overall cost controls. Isle-Bossier City showed a decrease in net revenues related to competitive pressures; however, Adjusted EBITDA(1) increased due to improved overall cost containment. The company expects to complete modest renovation of the Isle-Bossier City casino by the end of June 2005.

In Missouri, the company's two properties contributed 15% of its net revenues. Isle-Kansas City's net revenues and Adjusted EBITDA(1) were down due to the lower hold percentages. Isle-Boonville continues to show increases in net revenue and Adjusted EBITDA(1) as it penetrates its market more deeply.

In Iowa, the company's three casinos contributed 18% of its net revenues. In the Quad Cities, both properties experienced a slight decrease in net revenues related to increased marketing redemptions. Isle-Bettendorf increased Adjusted EBITDA(1) due primarily to labor related cost controls. Rhythm City-Davenport showed a decrease in Adjusted EBITDA(1) primarily due to a $0.8 million charge to increase the annual operating lease expense because of a change in the recognition of long term lease costs. Adjusted EBITDA(1) was also negatively impacted by a 2% increase in the Iowa gaming tax rates, which became effective July 1, 2004. Isle-Marquette experienced increases in both net revenues and Adjusted EBITDA(1) due to an increased response to marketing programs.

In Colorado, the company's two casino operations contributed 13% of its net revenues. Net revenues and Adjusted EBITDA(1) for these properties increased despite the continued construction during the quarter. The new 162- room Colorado Central Station hotel is currently ahead of schedule and expected to be completed by end of calendar year. Construction has now resumed on the extension of Main Street to Colorado Route 119, which was temporarily delayed due to engineering problems. Completion is expected in spring 2006. The sale of Colorado Grande was completed on April 25, 2005 and fiscal 2004 and 2005 results have been reclassified to reflect the Colorado Grande-Cripple Creek as discontinued operations.

Our international operations account for a small percentage of our overall revenues. Isle-Our Lucaya experienced an increase in net revenues and Adjusted EBITDA(1) due to a strong peak season and the recording of $2.0 million of business interruption proceeds, which was included in Adjusted EBITDA(1).

New development expense increased approximately $3.0 million due to the company's continuing development efforts in the United Kingdom, Florida, and Singapore.

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