Exhibit 99.1
FOR IMMEDIATE RELEASE | | For further information, call: |
| | Timothy R. Horne, Sr. Vice President-Finance |
Dover, Delaware, April 28, 2005 | | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE FIRST QUARTER ENDED MARCH 31, 2005
Dover Downs Gaming & Entertainment, Inc. (NYSE-Symbol: DDE) today reported results for the three months ended March 31, 2005.
Net earnings improved 12.3% to $4,979,000 compared with $4,434,000 for the first quarter of 2004.
Net earnings per diluted share were $.21 compared with $.17 per diluted share in 2004, a 23.5% improvement as a result of the aforementioned increase in net earnings and the impact of the shares repurchased as a result of a tender offer completed during the fourth quarter of 2004.
The Company’s revenues increased to $52,091,000 compared with $50,560,000 for the first quarter of 2004. Gaming revenues, which include video lottery win and harness racing commissions, increased 3.7% or $1,736,000, entirely as a result of increased video lottery win compared with the first quarter of 2004.
Occupancy levels in the Dover Downs Hotel and Conference Center remained strong, averaging approximately 90% for the first quarter. The Company also noted that the average win from slot players staying in the Dover Downs Hotel and Conference Center continues to improve.
Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, “We are very pleased with the continued growth in our slot win during the quarter. Given the fact that Easter fell in the first quarter this year, and our typical winter snowstorms happened to fall on weekends, our revenue growth could have been somewhat larger. However, we are very pleased with the results.”
The Company’s financial position remained strong, as amounts outstanding pursuant to the Company’s revolving credit facility were reduced by $5,950,000 during the quarter, to $46,000,000 at March 31, 2005.
The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.06 per share. The dividend is payable on June 10, 2005 to shareholders of record at the close of business on May 10, 2005.
* * *
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 Slots – a 91,000-square foot video lottery (slots) casino complex; the Dover Downs Hotel and Conference Center – featuring luxury accommodations with conference, banquet, fine dining, 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 STATEMENT OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
| | Three Months Ended
March 31, | |
| | 2005 | | 2004 | |
Revenues: | | | | | |
Gaming (1) | | $ | 49,045 | | $ | 47,309 | |
Other operating (2) | | 3,046 | | 3,251 | |
| | 52,091 | | 50,560 | |
Expenses: | | | | | |
Gaming | | 37,301 | | 37,652 | |
Other operating | | 2,995 | | 2,441 | |
General and administrative | | 1,254 | | 1,147 | |
Depreciation | | 1,717 | | 1,691 | |
| | 43,267 | | 42,931 | |
| | | | | |
Operating earnings | | 8,824 | | 7,629 | |
| | | | | |
Interest expense | | 427 | | 153 | |
| | | | | |
Earnings before income taxes | | 8,397 | | 7,476 | |
| | | | | |
Income taxes | | 3,418 | | 3,042 | |
| | | | | |
Net earnings | | $ | 4,979 | | $ | 4,434 | |
| | | | | |
Net earnings per common share: | | | | | |
- Basic | | $ | 0.21 | | $ | 0.17 | |
- Diluted | | $ | 0.21 | | $ | 0.17 | |
| | | | | |
Average shares outstanding: | | | | | |
- Basic | | 23,787 | | 26,478 | |
- Diluted | | 23,947 | | 26,545 | |
(1) Gaming revenues from the Company’s video lottery (slot) machine 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.
(2) Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis.
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEET
In Thousands
(Unaudited)
| | March 31,
2005 | | December 31,
2004 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash | | $ | 17,968 | | $ | 17,688 | |
Accounts receivable | | 2,378 | | 2,919 | |
Due from State of Delaware | | 2,383 | | 10,080 | |
Inventories | | 2,041 | | 2,147 | |
Prepaid expenses and other | | 1,681 | | 2,220 | |
Receivable from Dover Motorsports, Inc. | | 17 | | 2 | |
Deferred income taxes | | 2,237 | | 2,168 | |
Total current assets | | 28,705 | | 37,224 | |
| | | | | |
Property and equipment, net | | 122,409 | | 123,076 | |
Total assets | | $ | 151,114 | | $ | 160,300 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 5,295 | | $ | 6,801 | |
Purses due horsemen | | 2,371 | | 9,082 | |
Accrued liabilities | | 9,838 | | 11,990 | |
Income taxes payable | | 4,056 | | 651 | |
Deferred revenue | | 403 | | 195 | |
Total current liabilities | | 21,963 | | 28,719 | |
| | | | | |
Notes payable to banks | | 46,000 | | 51,950 | |
Deferred income taxes | | 6,798 | | 6,861 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 957 | | 936 | |
Class A common stock | | 1,434 | | 1,448 | |
Additional paid-in capital | | 36,579 | | 35,764 | |
Retained earnings | | 38,700 | | 35,156 | |
Deferred compensation | | (1,317 | ) | (534 | ) |
Total stockholders’ equity | | 76,353 | | 72,770 | |
Total liabilities and stockholders’ equity | | $ | 151,114 | | $ | 160,300 | |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
In Thousands
(Unaudited)
| | Three Months Ended
March 31, | |
| | 2005 | | 2004 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | | $ | 4,979 | | $ | 4,434 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | |
Depreciation | | 1,717 | | 1,691 | |
Amortization of credit facility origination fees | | 13 | | 13 | |
Amortization of deferred compensation | | 60 | | — | |
Deferred income taxes | | (132 | ) | 193 | |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | 541 | | (1,782 | ) |
Due from State of Delaware | | 7,697 | | 5,342 | |
Inventories | | 106 | | (74 | ) |
Prepaid expenses and other | | 526 | | 1,066 | |
Receivable from/payable to Dover Motorsports, Inc. | | (15 | ) | (99 | ) |
Accounts payable | | (1,058 | ) | (411 | ) |
Purses due horsemen | | (6,711 | ) | (4,744 | ) |
Accrued liabilities | | (2,152 | ) | (683 | ) |
Income taxes payable | | 3,405 | | 2,471 | |
Deferred revenue | | 208 | | (21 | ) |
Net cash provided by operating activities | | 9,184 | | 7,396 | |
| | | | | |
Investing activities: | | | | | |
Capital expenditures | | (1,498 | ) | (2,900 | ) |
Net cash used in investing activities | | (1,498 | ) | (2,900 | ) |
| | | | | |
Financing activities: | | | | | |
Borrowings from revolving debt | | 41,975 | | 46,150 | |
Repayments of revolving debt | | (47,925 | ) | (47,600 | ) |
Dividends paid | | (1,435 | ) | (1,325 | ) |
Other | | (21 | ) | — | |
Net cash used in financing activities | | (7,406 | ) | (2,775 | ) |
| | | | | |
Net increase in cash | | 280 | | 1,721 | |
Cash, beginning of period | | 17,688 | | 14,138 | |
Cash, end of period | | $ | 17,968 | | $ | 15,859 | |
