DOVER, Del.--(BUSINESS WIRE)--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the fourth quarter and year ended December 31, 2010.
The Company’s revenues were $57,941,000 compared with $55,375,000 for the fourth quarter of 2009. Gaming revenue increased 4.8% compared to the fourth quarter of last year. Lower slot win was offset by table game revenue for the quarter.
Gaming profits were lower compared to the fourth quarter of last year as a result of the lower slot win and from the high gaming taxes, license fees and costs associated with table game operations.
Other operating revenues increased 2.5%. Occupancy levels in the Dover Downs Hotel were approximately 83% for the fourth quarter of 2010 compared with approximately 77% for the fourth quarter of 2009.
Interest expense increased $293,000 during the quarter with lower average outstanding borrowings offset by higher interest rates.
Net earnings were $501,000, or $.02 per diluted share, compared with $1,815,000, or $.06 per diluted share for the fourth quarter of 2009.
Net earnings for the year were $6,743,000, or $.21 per diluted share compared with $11,277,000 or $.35 per diluted share for 2009.
Denis McGlynn, the Company's President and Chief Executive Officer, stated: "As the regional gaming environment becomes more crowded and increasingly competitive, our customer service, gaming offerings and entertainment options remain second to none. We have invested heavily in what we will need to attract and retain the more discriminating gaming customers in Delaware and surrounding states. We have also launched new initiatives focused on increasing our market share through programs that introduce Dover to more table game customers."
The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on March 10, 2011 to shareholders of record at the close of business on February 10, 2011.
This release contains or may contain forward-looking statements based on management’s beliefs and assumptions. Such statements are subject to various risks and uncertainties that could cause results to vary materially. Please refer to the Company’s SEC filings for a discussion of such factors.
Dover Downs Gaming & Entertainment, Inc. is a diversified gaming and entertainment company whose operations consist of Dover Downs Casino – a 165,000-square foot casino complex featuring popular table games, the latest in slot machine offerings, multi-player electronic table games, the Crown Royal poker room, and a Race & Sports Book operation; the Dover Downs Hotel and Conference Center – a 500 room AAA Four Diamond hotel with conference, banquet, fine dining, spa, retail, ballroom and concert hall facilities; and Dover Downs Raceway – a harness racing track with pari-mutuel wagering on live and simulcast horse races.
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Years Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| Revenues: | ||||||||||||
| Gaming (1) | $ | 52,915 | $ | 50,470 | $ | 217,267 | $ | 213,855 | ||||
| Other operating (2) | 5,026 | 4,905 | 20,882 | 18,944 | ||||||||
| 57,941 | 55,375 | 238,149 | 232,799 | |||||||||
| Expenses: | ||||||||||||
| Gaming | 47,796 | 43,354 | 188,293 | 175,785 | ||||||||
| Other operating | 3,838 | 3,894 | 16,127 | 14,758 | ||||||||
| General and administrative | 1,577 | 1,491 | 6,922 | 6,678 | ||||||||
| Impairment charge | - | - | - | 2,177 | ||||||||
| Depreciation | 3,110 | 3,020 | 12,059 | 11,939 | ||||||||
| 56,321 | 51,759 | 223,401 | 211,337 | |||||||||
| Operating earnings | 1,620 | 3,616 | 14,748 | 21,462 | ||||||||
| Interest expense | 835 | 542 | 3,254 | 2,376 | ||||||||
| Earnings before income taxes | 785 | 3,074 | 11,494 | 19,086 | ||||||||
| Income taxes | 284 | 1,259 | 4,751 | 7,809 | ||||||||
| Net earnings | $ | 501 | $ | 1,815 | $ | 6,743 | $ | 11,277 | ||||
| Net earnings per common share: | ||||||||||||
| - Basic | $ | 0.02 | $ | 0.06 | $ | 0.21 | $ | 0.35 | ||||
| - Diluted | $ | 0.02 | $ | 0.06 | $ | 0.21 | $ | 0.35 | ||||
| Weighted average shares outstanding: | ||||||||||||
| - Basic | 31,558 | 31,496 | 31,555 | 31,492 | ||||||||
| - Diluted | 31,558 | 31,496 | 31,555 | 31,492 | ||||||||
| _________________________ | ||
| (1) |
Gaming revenues from the Company’s slot machine and table game operations include the total win from such operations. The Delaware State Lottery Office collects the win and remits a portion thereof to the Company as its commission for acting as a Licensed Agent. The difference between total win and the amount remitted to the Company is reflected in gaming expenses. |
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| (2) |
Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis. |
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| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||
| RECONCILIATION OF GAAP EARNINGS TO ADJUSTED EARNINGS | ||||||
| In Thousands, Except Per Share Amounts | ||||||
| (Unaudited) | ||||||
| Years Ended | ||||||
| December 31, | ||||||
| 2010 | 2009 | |||||
| GAAP earnings before income tax expense | $ | 11,494 | $ | 19,086 | ||
| Non-cash impairment charges (1) | - | 2,177 | ||||
| Adjusted earnings before income tax expense | $ | 11,494 | $ | 21,263 | ||
| GAAP net earnings | $ | 6,743 | $ | 11,277 | ||
| Non-cash impairment charges, net of income taxes (1) | - | 1,292 | ||||
| Adjusted net earnings | $ | 6,743 | $ | 12,569 | ||
| GAAP net earnings per common share - diluted | $ | 0.21 | $ | 0.35 | ||
| Non-cash impairment charges, net of income taxes (1) | - | 0.04 | ||||
| Adjusted net earnings per common share - diluted | $ | 0.21 | $ | 0.39 | ||
| _________________________ | ||
| (1) |
We had previously completed architectural and engineering work related to a Phase 7 casino expansion that would have included, among other things, a new sports book facility and a parking garage. Given the court decision to limit the extent of sports wagering and the higher gaming tax rates that were legislated, we decided not to proceed with this project. As a result, $2,177,000 of previously capitalized costs were written off during the third quarter of 2009. |
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| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 18,819 | $ | 21,415 | ||||
| Accounts receivable | 3,098 | 2,636 | ||||||
| Due from State of Delaware | 9,829 | 11,069 | ||||||
| Inventories | 1,989 | 2,170 | ||||||
| Prepaid expenses and other | 2,551 | 2,151 | ||||||
| Receivable from Dover Motorsports, Inc. | 18 | 5 | ||||||
| Income taxes receivable | 617 | 129 | ||||||
| Deferred income taxes | 1,349 | 1,209 | ||||||
| Total current assets | 38,270 | 40,784 | ||||||
| Property and equipment, net | 186,227 | 192,360 | ||||||
| Other assets | 789 | 863 | ||||||
| Total assets | $ | 225,286 | $ | 234,007 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,742 | $ | 3,078 | ||||
| Purses due horsemen | 9,829 | 10,219 | ||||||
| Accrued liabilities | 12,286 | 8,788 | ||||||
| Deferred revenue | 307 | 306 | ||||||
| Total current liabilities | 26,164 | 22,391 | ||||||
| Revolving line of credit | 78,600 | 95,125 | ||||||
| Liability for pension benefits | 4,949 | 4,900 | ||||||
| Other liabilities | 598 | 186 | ||||||
| Deferred income taxes | 4,224 | 4,166 | ||||||
| Total liabilities | 114,535 | 126,768 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1,564 | 1,546 | ||||||
| Class A common stock | 1,660 | 1,660 | ||||||
| Additional paid-in capital | 2,721 | 1,664 | ||||||
| Retained earnings | 106,432 | 103,559 | ||||||
| Accumulated other comprehensive loss | (1,626 | ) | (1,190 | ) | ||||
| Total stockholders’ equity | 110,751 | 107,239 | ||||||
| Total liabilities and stockholders’ equity | $ | 225,286 | $ | 234,007 | ||||
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| Years Ended | ||||||||
| December 31, | ||||||||
| 2010 | 2009 | |||||||
| Operating activities: | ||||||||
| Net earnings | $ | 6,743 | $ | 11,277 | ||||
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Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Depreciation | 12,059 | 11,939 | ||||||
| Amortization of credit facility origination fees | 72 | 39 | ||||||
| Stock-based compensation | 1,192 | 952 | ||||||
| Deferred income taxes | (85 | ) | 187 | |||||
| Impairment charge | - | 2,177 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (462 | ) | 25 | |||||
| Due from State of Delaware | 1,240 | (199 | ) | |||||
| Inventories | (168 | ) | (145 | ) | ||||
| Prepaid expenses and other | (392 | ) | 42 | |||||
| Receivable from/payable to Dover Motorsports, Inc. | (13 | ) | (16 | ) | ||||
| Income taxes receivable/payable | (187 | ) | (653 | ) | ||||
| Accounts payable | 664 | (184 | ) | |||||
| Purses due horsemen | (390 | ) | 33 | |||||
| Accrued liabilities | 3,498 | 1,369 | ||||||
| Deferred revenue | 1 | 94 | ||||||
| Other liabilities | (278 | ) | 800 | |||||
| Net cash provided by operating activities | 23,494 | 27,737 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (5,576 | ) | (4,535 | ) | ||||
| Proceeds from sale of available-for-sale securities | 65 | 102 | ||||||
| Purchase of available-for-sale securities | (67 | ) | (104 | ) | ||||
| Net cash used in investing activities | (5,578 | ) | (4,537 | ) | ||||
| Financing activities: | ||||||||
| Borrowings from revolving line of credit | 116,300 | 157,875 | ||||||
| Repayments of revolving line of credit | (132,825 | ) | (171,075 | ) | ||||
| Dividends paid | (3,870 | ) | (6,415 | ) | ||||
| Repurchase of common stock | (117 | ) | (59 | ) | ||||
| Net cash used in financing activities | (20,512 | ) | (19,674 | ) | ||||
| Net (decrease) increase in cash | (2,596 | ) | 3,526 | |||||
| Cash, beginning of year | 21,415 | 17,889 | ||||||
| Cash, end of year | $ | 18,819 | $ | 21,415 | ||||