DOVER, Del.--(BUSINESS WIRE)--Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the three months ended September 30, 2012.
Gaming revenues of $49,001,000 were down 10.8 % compared to the third quarter of 2011. The revenue decline was primarily attributable to increased competition in the region.
Other operating revenues of $5,913,000 were up 14.4% compared to the third quarter of 2011. The improvement was from increased food and beverage revenue related to catering services for the NASCAR weekend in Dover which was held in the third quarter of this year compared to the fourth quarter of last year. Rooms revenue also improved as occupancy levels in the Dover Downs Hotel were approximately 94% for the third quarter.
General and administrative costs of $1,464,000 for the third quarter were almost identical to last year.
Interest expense decreased $241,000 during the quarter as a result of lower average outstanding borrowings and lower interest rates.
Net earnings were $1,147,000, or $.04 per diluted share compared with $2,039,000 or $.06 per diluted share for the third quarter of 2011.
Denis McGlynn, the Company's President and Chief Executive Officer, stated: "Gaming expansion in Maryland is having a significant impact on us – but it is simply part of a new reality that we need to address head on. Earlier in the year, we worked with the Administration and the Legislature to pass the only comprehensive internet gaming legislation on the East Coast. Our goal is to stay one step ahead of the competition and to continue offering our patrons the region’s finest amenities and richest gaming experiences. We look forward to continued cooperation with the State as we roll out our internet gaming offerings early next year and make our case for a review of revenue distribution when the legislature reconvenes in January.”
The Company announced yesterday that its Board of Directors declared a reduced regular quarterly dividend of $.02 per share. The dividend is payable on December 10, 2012 to shareholders of record at the close of business on November 10, 2012.
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.
Owned by Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE), Dover Downs Hotel & Casino® is a premier gaming and entertainment resort destination in the Mid-Atlantic region. Gaming operations consist of approximately 2,500 slots and a full complement of table games including poker. The AAA-rated Four Diamond hotel is Delaware’s largest with 500 luxurious rooms/suites and amenities including a full-service spa/salon, concert hall and 41,500 sq. ft. of multi-use event space. Live, world-class harness racing is featured November through April, and horse racing is simulcast year-round. Professional football parlay betting is accepted during the season. Additional property amenities include multiple restaurants from fine dining to casual fare, bars/lounges and retail shops. For more information, please visit www.doverdowns.com.
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: | ||||||||||||||||
| Gaming (1) | $ | 49,001 | $ | 54,935 | $ | 159,806 | $ | 162,396 | ||||||||
| Other operating (2) | 5,913 | 5,167 | 17,547 | 15,927 | ||||||||||||
| 54,914 | 60,102 | 177,353 | 178,323 | |||||||||||||
| Expenses: | ||||||||||||||||
| Gaming | 44,508 | 48,218 | 141,951 | 144,924 | ||||||||||||
| Other operating | 4,111 | 3,676 | 12,350 | 11,725 | ||||||||||||
| General and administrative | 1,464 | 1,461 | 4,528 | 4,854 | ||||||||||||
| Depreciation | 2,523 | 2,823 | 7,769 | 8,868 | ||||||||||||
| 52,606 | 56,178 | 166,598 | 170,371 | |||||||||||||
| Operating earnings | 2,308 | 3,924 | 10,755 | 7,952 | ||||||||||||
| Loss on extinguishment of debt | - | - | - | 45 | ||||||||||||
| Interest expense | 405 | 646 | 1,417 | 2,247 | ||||||||||||
| Earnings before income taxes | 1,903 | 3,278 | 9,338 | 5,660 | ||||||||||||
| Income taxes | 756 | 1,239 | 4,003 | 2,421 | ||||||||||||
| Net earnings | $ | 1,147 | $ | 2,039 | $ | 5,335 | $ | 3,239 | ||||||||
| Net earnings per common share: | ||||||||||||||||
| - Basic | $ | 0.04 | $ | 0.06 | $ | 0.16 | $ | 0.10 | ||||||||
| - Diluted | $ | 0.04 | $ | 0.06 | $ | 0.16 | $ | 0.10 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| - Basic | 31,745 | 31,646 | 31,744 | 31,645 | ||||||||||||
| - Diluted | 31,745 | 31,646 | 31,744 | 31,645 | ||||||||||||
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| (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. | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||
| In Thousands | |||||||||||||
| (Unaudited) | |||||||||||||
| September 30, | December 31, | ||||||||||||
| 2012 | 2011 | ||||||||||||
| ASSETS | |||||||||||||
| Current assets: | |||||||||||||
| Cash | $ | 15,828 | $ | 18,634 | |||||||||
| Accounts receivable | 3,133 | 3,982 | |||||||||||
| Due from State of Delaware | 11,134 | 9,440 | |||||||||||
| Inventories | 2,084 | 1,860 | |||||||||||
| Prepaid expenses and other | 4,612 | 3,659 | |||||||||||
| Deferred income taxes | 1,319 | 1,317 | |||||||||||
| Total current assets | 38,110 | 38,892 | |||||||||||
| Property and equipment, net | 170,804 | 176,415 | |||||||||||
| Other assets | 785 | 877 | |||||||||||
| Total assets | $ | 209,699 | $ | 216,184 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 2,536 | $ | 4,035 | |||||||||
| Purses due horsemen | 11,140 | 9,004 | |||||||||||
| Accrued liabilities | 10,129 | 11,912 | |||||||||||
| Payable to Dover Motorsports, Inc. | - | 11 | |||||||||||
| Income taxes payable | 445 | 444 | |||||||||||
| Deferred revenue | 331 | 254 | |||||||||||
| Total current liabilities | 24,581 | 25,660 | |||||||||||
| Revolving line of credit | 61,500 | 69,000 | |||||||||||
| Liability for pension benefits | 5,152 | 5,570 | |||||||||||
| Other liabilities | - | 147 | |||||||||||
| Deferred income taxes | 2,937 | 3,301 | |||||||||||
| Total liabilities | 94,170 | 103,678 | |||||||||||
| Stockholders’ equity: | |||||||||||||
| Common stock | 1,590 | 1,576 | |||||||||||
| Class A common stock | 1,660 | 1,660 | |||||||||||
| Additional paid-in capital | 3,943 | 3,464 | |||||||||||
| Retained earnings | 110,500 | 108,090 | |||||||||||
| Accumulated other comprehensive loss | (2,164 | ) | (2,284 | ) | |||||||||
| Total stockholders’ equity | 115,529 | 112,506 | |||||||||||
| Total liabilities and stockholders’ equity | $ | 209,699 | $ | 216,184 | |||||||||
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| In Thousands | |||||||||||||
| (Unaudited) | |||||||||||||
| Nine Months Ended | |||||||||||||
| September 30, | |||||||||||||
| 2012 | 2011 | ||||||||||||
| Operating activities: | |||||||||||||
| Net earnings | $ | 5,335 | $ | 3,239 | |||||||||
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Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Depreciation | 7,769 | 8,868 | |||||||||||
| Amortization of credit facility origination fees | 74 | 67 | |||||||||||
| Stock-based compensation | 600 | 745 | |||||||||||
| Deferred income taxes | (126 | ) | 320 | ||||||||||
| Loss on extinguishment of debt | - | 45 | |||||||||||
| Changes in assets and liabilities: | |||||||||||||
| Accounts receivable | 849 | 1,114 | |||||||||||
| Due from State of Delaware | (1,694 | ) | (423 | ) | |||||||||
| Inventories | (224 | ) | (215 | ) | |||||||||
| Prepaid expenses and other | (917 | ) | (1,865 | ) | |||||||||
| Accounts payable | (1,499 | ) | 1,083 | ||||||||||
| Purses due horsemen | 2,136 | 431 | |||||||||||
| Accrued liabilities | (1,783 | ) | (3,976 | ) | |||||||||
| Payable to/receivable from Dover Motorsports, Inc. | (11 | ) | 14 | ||||||||||
| Income taxes payable/receivable | (327 | ) | 146 | ||||||||||
| Deferred revenue | 77 | (42 | ) | ||||||||||
| Other liabilities | (375 | ) | (412 | ) | |||||||||
| Net cash provided by operating activities | 9,884 | 9,139 | |||||||||||
| Investing activities: | |||||||||||||
| Capital expenditures | (2,158 | ) | (1,438 | ) | |||||||||
| Proceeds from sale of available-for-sale securities | - | 127 | |||||||||||
| Purchase of available-for-sale securities | - | (202 | ) | ||||||||||
| Net cash used in investing activities | (2,158 | ) | (1,513 | ) | |||||||||
| Financing activities: | |||||||||||||
| Borrowings from revolving line of credit | 12,910 | 168,943 | |||||||||||
| Repayments of revolving line of credit | (20,410 | ) | (176,028 | ) | |||||||||
| Dividends paid | (2,925 | ) | (2,916 | ) | |||||||||
| Repurchase of common stock | (107 | ) | (150 | ) | |||||||||
| Credit facility fees | - | (268 | ) | ||||||||||
| Net cash used in financing activities | (10,532 | ) | (10,419 | ) | |||||||||
| Net decrease in cash | (2,806 | ) | (2,793 | ) | |||||||||
| Cash, beginning of period | 18,634 | 18,819 | |||||||||||
| Cash, end of period | $ | 15,828 | $ | 16,026 | |||||||||