Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, April 30, 2009 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2009
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2009.
The Company’s revenues fell 1.2% to $59,080,000 during the first quarter of 2009 compared with $59,789,000 for the first quarter of 2008. Gaming revenues decreased 2% during the quarter while other revenues were up 10.2% as a result of the Company’s expanded entertainment complex. Total occupancy for the 500 room Dover Downs Hotel was 76% for the first quarter of 2009.
Gaming expenses were higher from increased gaming taxes and slot machine fees that resulted from legislation passed in June of 2008 that became effective on July 1, 2008. These increases were approximately $960,000 for the first quarter of 2009.
Interest expense decreased $298,000 during the quarter, primarily from lower interest rates which offset higher borrowings related to the casino expansion that was completed in the third quarter of 2008. Depreciation expense increased $567,000, primarily related to the casino expansion.
Net earnings were $4,293,000 compared with $5,321,000 for the first quarter of 2008. Net earnings per diluted share for the quarter were $.14 compared with $.17 last year.
Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, “Despite the continued decline in consumer spending during the first quarter, our commitment to reinvest in our property and to continually expand and enhance the gaming and other entertainment options available to our patrons combined with our award winning customer service, have enabled us to effectively retain our top-line and grow our market share during these difficult times.”
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, 2009 to shareholders of record at the close of business on May 10, 2009.
* * *
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 165,000-square foot video lottery casino complex featuring the latest in slot machine offerings, including multi-player electronic table games with virtual dealers; the Dover Downs Hotel and Conference Center – a 500 room AAA Four Diamond hotel 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, | |
| | 2009 | | 2008 | |
Revenues: | | | | | |
Gaming (1) | | $ | 54,903 | | $ | 56,000 | |
Other operating (2) | | 4,177 | | 3,789 | |
| | 59,080 | | 59,789 | |
Expenses: | | | | | |
Gaming | | 43,153 | | 42,411 | |
Other operating | | 3,343 | | 3,299 | |
General and administrative | | 1,730 | | 1,764 | |
Depreciation | | 2,948 | | 2,381 | |
| | 51,174 | | 49,855 | |
| | | | | |
Operating earnings | | 7,906 | | 9,934 | |
| | | | | |
Interest expense | | 637 | | 935 | |
| | | | | |
Earnings before income taxes | | 7,269 | | 8,999 | |
| | | | | |
Income taxes | | 2,976 | | 3,678 | |
| | | | | |
Net earnings | | $ | 4,293 | | $ | 5,321 | |
| | | | | |
Net earnings per common share: | | | | | |
- Basic | | $ | 0.14 | | $ | 0.17 | |
- Diluted | | $ | 0.14 | | $ | 0.17 | |
| | | | | |
Weighted average shares outstanding: | | | | | |
- Basic | | 31,485 | | 31,426 | |
- Diluted | | 31,485 | | 31,667 | |
(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,
2009 | | December 31,
2008 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash | | $ | 16,638 | | $ | 17,889 | |
Accounts receivable | | 3,987 | | 2,661 | |
Due from State of Delaware | | 3,944 | | 10,870 | |
Inventories | | 2,104 | | 2,025 | |
Prepaid expenses and other | | 2,381 | | 2,029 | |
Receivable from Dover Motorsports, Inc. | | 5 | | — | |
Deferred income taxes | | 1,224 | | 1,317 | |
Total current assets | | 30,283 | | 36,791 | |
| | | | | |
Property and equipment, net | | 200,912 | | 203,522 | |
Other assets | | 976 | | 1,019 | |
Total assets | | $ | 232,171 | | $ | 241,332 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 3,118 | | $ | 4,679 | |
Purses due horsemen | | 2,341 | | 9,395 | |
Accrued liabilities | | 10,025 | | 7,419 | |
Payable to Dover Motorsports, Inc. | | — | | 11 | |
Income taxes payable | | 3,448 | | 619 | |
Deferred revenue | | 216 | | 212 | |
Total current liabilities | | 19,148 | | 22,335 | |
| | | | | |
Revolving line of credit | | 99,500 | | 108,325 | |
Liability for pension benefits | | 6,062 | | 6,099 | |
Other liabilities | | 328 | | — | |
Deferred income taxes | | 3,468 | | 3,488 | |
Total liabilities | | 128,506 | | 140,247 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 1,547 | | 1,521 | |
Class A common stock | | 1,660 | | 1,660 | |
Additional paid-in capital | | 963 | | 933 | |
Retained earnings | | 101,952 | | 99,263 | |
Accumulated other comprehensive loss | | (2,457 | ) | (2,292 | ) |
Total stockholders’ equity | | 103,665 | | 101,085 | |
Total liabilities and stockholders’ equity | | $ | 232,171 | | $ | 241,332 | |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| | Three Months Ended
March 31, | |
| | 2009 | | 2008 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | | $ | 4,293 | | $ | 5,321 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | |
Depreciation | | 2,948 | | 2,381 | |
Amortization of credit facility origination fees | | 10 | | 10 | |
Stock-based compensation | | 238 | | 277 | |
Deferred income taxes | | 32 | | 22 | |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | (1,326 | ) | 315 | |
Due from State of Delaware | | 6,926 | | 7,838 | |
Inventories | | (79 | ) | 36 | |
Prepaid expenses and other | | (326 | ) | (43 | ) |
Receivable from/payable to Dover Motorsports, Inc. | | (16 | ) | (58 | ) |
Accounts payable | | 19 | | 1,152 | |
Purses due horsemen | | (7,054 | ) | (8,768 | ) |
Accrued liabilities | | 2,606 | | (1,798 | ) |
Income taxes payable | | 2,846 | | 3,637 | |
Deferred revenue | | 4 | | 80 | |
Other liabilities | | 20 | | (182 | ) |
Net cash provided by operating activities | | 11,141 | | 10,220 | |
| | | | | |
Investing activities: | | | | | |
Capital expenditures | | (1,918 | ) | (11,117 | ) |
Net cash used in investing activities | | (1,918 | ) | (11,117 | ) |
| | | | | |
Financing activities: | | | | | |
Borrowings from revolving line of credit | | 43,355 | | 41,505 | |
Repayments of revolving line of credit | | (52,180 | ) | (41,430 | ) |
Dividends paid | | (1,604 | ) | (1,587 | ) |
Repurchase of common stock | | (45 | ) | (899 | ) |
Proceeds from stock options exercised | | — | | 12 | |
Excess tax benefit on stock awards | | — | | 22 | |
Net cash used in financing activities | | (10,474 | ) | (2,377 | ) |
| | | | | |
Net decrease in cash | | (1,251 | ) | (3,274 | ) |
Cash, beginning of period | | 17,889 | | 22,456 | |
Cash, end of period | | $ | 16,638 | | $ | 19,182 | |
