Exhibit 99.1
FOR IMMEDIATE RELEASE | | For further information, call: |
| | Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, April 24, 2008 | | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2008
Dover Downs Gaming & Entertainment, Inc. (NYSE-Symbol: DDE) today reported results for the three months ended March 31, 2008.
The Company’s revenues fell 1.4% to $59,789,000 compared with $60,631,000 for the first quarter of 2007. Gaming revenues were lower during the quarter, while other revenues were up 3.6%.
Interest expense increased $411,000 during the quarter, primarily from borrowings related to share buybacks and the fact that interest related to the Dover Downs Hotel expansion is no longer being capitalized. Depreciation expense increased $639,000, primarily related to the expansion of the Dover Downs Hotel.
Net earnings were $5,321,000 compared with net earnings of $6,881,000 for the first quarter of 2007. Net earnings per diluted share for the quarter were $.17 compared with $.21 last year.
Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, “The overall state of the economy and the general reticence of consumers to spend on discretionary items clearly impacted our business during the quarter. We remain confident that our expansion programs will benefit us when the economy rebounds.”
Construction remains on budget and on schedule for a summer opening of the Colonnade, the Company’s Phase VI Casino Expansion, which will add nearly 70,000 square feet to the Dover Downs Casino. The expansion will feature a stunning new main entrance to the casino, a new gaming floor with room for more than 500 additional slot machines and the new Dover Downs Fire and Ice Lounge – an upscale lounge/nightclub that will seat about 200 guests and provide an exciting venue to see live entertainment or watch sporting events. The Colonnade will also feature three new restaurants – Public House, Doc Magrogan’s Oyster House and Marabella’s Italian restaurant, as well as four retail shops including Godiva Chocolatier, Swarovski, Fashions of The Colonnade and The Colonnade Marketplace.
Renovation of the original Dover Downs Hotel was completed after the end of the quarter. The Company had 424 average room nights available during the quarter with occupancy levels of just over 82%.
The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.05 per share. The dividend is payable on June 10, 2008 to shareholders of record at the close of business on May 10, 2008.
Also during the quarter, the Company repurchased 83,500 shares of common stock at an average price of $9.34 per share, not including nominal brokerage commissions.
* * *
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 97,000-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 STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
| | Three Months Ended | |
| | March 31, | |
| | 2008 | | 2007 | |
Revenues: | | | | | |
Gaming (1) | | $ | 56,000 | | $ | 56,972 | |
Other operating (2) | | 3,789 | | 3,659 | |
| | 59,789 | | 60,631 | |
Expenses: | | | | | |
Gaming | | 42,411 | | 41,851 | |
Other operating | | 3,299 | | 3,280 | |
General and administrative | | 1,764 | | 1,570 | |
Depreciation | | 2,381 | | 1,742 | |
| | 49,855 | | 48,443 | |
| | | | | |
Operating earnings | | 9,934 | | 12,188 | |
| | | | | |
Interest expense | | 935 | | 524 | |
| | | | | |
Earnings before income taxes | | 8,999 | | 11,664 | |
| | | | | |
Income taxes | | 3,678 | | 4,783 | |
| | | | | |
Net earnings | | $ | 5,321 | | $ | 6,881 | |
| | | | | |
Net earnings per common share: | | | | | |
- Basic | | $ | 0.17 | | $ | 0.21 | |
- Diluted | | $ | 0.17 | | $ | 0.21 | |
| | | | | |
Weighted average shares outstanding: | | | | | |
- Basic | | 31,426 | | 32,301 | |
- Diluted | | 31,667 | | 32,637 | |
(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 SHEETS
In Thousands
(Unaudited)
| | March 31, | | December 31, | |
| | 2008 | | 2007 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash | | $ | 19,182 | | $ | 22,456 | |
Accounts receivable | | 4,245 | | 4,560 | |
Due from State of Delaware | | 2,692 | | 10,530 | |
Inventories | | 1,822 | | 1,858 | |
Prepaid expenses and other | | 2,284 | | 2,251 | |
Receivable from Dover Motorsports, Inc. | | 40 | | — | |
Deferred income taxes | | 1,216 | | 1,227 | |
Total current assets | | 31,481 | | 42,882 | |
| | | | | |
Property and equipment, net | | 191,682 | | 182,298 | |
Total assets | | $ | 223,163 | | $ | 225,180 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 15,182 | | $ | 13,382 | |
Purses due horsemen | | 921 | | 9,689 | |
Accrued liabilities | | 10,142 | | 11,940 | |
Payable to Dover Motorsports, Inc. | | — | | 18 | |
Income taxes payable | | 3,978 | | 341 | |
Deferred revenue | | 178 | | 98 | |
Total current liabilities | | 30,401 | | 35,468 | |
| | | | | |
Revolving line of credit | | 92,500 | | 92,425 | |
Liability for pension benefits | | 2,328 | | 2,510 | |
Deferred income taxes | | 5,187 | | 5,178 | |
Total liabilities | | 130,416 | | 135,581 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 1,477 | | 1,474 | |
Class A common stock | | 1,700 | | 1,700 | |
Additional paid-in capital | | — | | 63 | |
Retained earnings | | 89,846 | | 86,640 | |
Accumulated other comprehensive loss | | (276 | ) | (278 | ) |
Total stockholders’ equity | | 92,747 | | 89,599 | |
Total liabilities and stockholders’ equity | | $ | 223,163 | | $ | 225,180 | |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| | Three Months Ended March 31, | |
| | 2008 | | 2007 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | | $ | 5,321 | | $ | 6,881 | |
Adjustments to reconcile net earnings to | | | | | |
net cash provided by operating activities: | | | | | |
Depreciation | | 2,381 | | 1,742 | |
Amortization of credit facility origination fees | | 10 | | 11 | |
Stock-based compensation | | 277 | | 216 | |
Deferred income taxes | | 22 | | (123 | ) |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | 315 | | 142 | |
Due from State of Delaware | | 7,838 | | 7,403 | |
Inventories | | 36 | | 4 | |
Prepaid expenses and other | | (43 | ) | 48 | |
Receivable from/payable to Dover Motorsports, Inc. | | (58 | ) | 46 | |
Accounts payable | | 1,152 | | 2,486 | |
Purses due horsemen | | (8,768 | ) | (6,074 | ) |
Accrued liabilities | | (1,798 | ) | (2,017 | ) |
Income taxes payable/prepaid income taxes | | 3,637 | | 4,873 | |
Deferred revenue | | 80 | | 73 | |
Other liabilities | | (182 | ) | (187 | ) |
Net cash provided by operating activities | | 10,220 | | 15,524 | |
| | | | | |
Investing activities: | | | | | |
Capital expenditures | | (11,117 | ) | (9,981 | ) |
Net cash used in investing activities | | (11,117 | ) | (9,981 | ) |
| | | | | |
Financing activities: | | | | | |
Borrowings from revolving line of credit | | 41,505 | | 33,325 | |
Repayments of revolving line of credit | | (41,430 | ) | (39,750 | ) |
Dividends paid | | (1,587 | ) | (1,469 | ) |
Repurchase of common stock | | (899 | ) | (71 | ) |
Proceeds from stock options exercised | | 12 | | 999 | |
Excess tax benefit on stock awards | | 22 | | 33 | |
Net cash used in financing activities | | (2,377 | ) | (6,933 | ) |
| | | | | |
Net decrease in cash | | (3,274 | ) | (1,390 | ) |
Cash, beginning of period | | 22,456 | | 20,020 | |
Cash, end of period | | $ | 19,182 | | $ | 18,630 | |
