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Non-Tech : Lake City Gaming: LCG-V
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To: K. Anders who wrote (101)3/28/1999 10:57:00 AM
From: Jerrold Annett  Read Replies (2) of 124
 
Using Q1, Q2 1999 numbers....I have done the following math.
Q1 and Q2 net after tax earnings were approx. $1.7 M

LCG had at the time 519 slot machines during Q1 and 519 slot machines for 90% of Q2 increasing to 607 slot machines for the remainder due to the opening and expansion of the Vernon Casino. Lets just say 519 slots to keep it simple.

fact: 80% of income comes from slots so I just multiplied 1.7M dollars by 80% to get $1.36M divided by 519 slots and we get roughly $2,500 of earnings after-tax per slot per Quarter.

1. Vernon Expansion increase of 88 slots * $1,250
2. Kelowna Expansion increase of 145 slots * $1,250
3. Penticton Casino increase of 250 slots * $2,500
Overall 483 slots = $916,000/Quarter

For 1 & 2.....I don't think it would be fair to expect the $2,500 of earnings for the increase of slots since this would imply that for a doubling of slot machines....we would get a doubling of revenue at the same facility....so let us be conservative and predict 50% of $2,500 for the added slots. For Penticton we will go with the $2,500 per slot.

Current earning per share =$0.32/yr
Increase with expansions 4 * $915,000/11.8M = $0.31/yr
Total = $0.63/yr.

Using the same format above to determine the 3% facility assistance projections

Current earnings per share (3% facility assist.) = $0.17/yr
Increase with expansions 4* $360,000/11.8M = $0.12/yr
Total = $0.29/yr.

Overall then $0.63 + $0.29 = $0.92/year
Using a PE factor of 10 to 15 we get any where from $9.20 to $13.80 within the next year.

Any comments out there?

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