Exhibit 99.1
FOR IMMEDIATE RELEASE | | For further information, call: |
| | Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, April 29, 2010 | | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2010
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2010.
The Company’s revenues for the first quarter of 2010 were $56,050,000 compared with $59,080,000 for the first quarter of 2009. Gaming revenues were down 5.8% as inclement weather had a significant impact on several weekends during the quarter. The region experienced several record setting snow storms, two of which resulted in six days being declared states of emergency in Delaware.
Other operating revenues increased 4.2% from higher cash hotel and restaurant revenues. Occupancy levels in the Dover Downs Hotel were approximately 73% for the first quarter of 2010 compared with approximately 76% for the first quarter of 2009.
Gaming expenses were higher from significantly increased gaming taxes and fees that became effective at the end of May of 2009. The impact of these tax increases was approximately $3.4 million or approximately $.06 per diluted share for the first quarter of 2010.
Interest expense increased $46,000 during the quarter, primarily from slightly higher interest rates.
The effective income tax rate for the quarter was 47.6% compared to 40.9% in the first quarter last year. The increase for this interim period relates to the tax impact of restricted stock awards that vested during the quarter. The Company expects the effective income tax rate to approximate 42% for the year.
Net earnings were $1,673,000, or $.05 per diluted share, compared with $4,293,000, or $.13 per diluted share for the first quarter of 2009.
In January of this year the State of Delaware legalized table games at the State’s three video lottery facilities. The Company is currently undergoing the necessary construction, training and regulatory submissions, and hopes to have table games operational by the end of the second quarter.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “While the magnitude of last year’s tax increase will be difficult to overcome, we look forward to the potential benefits of adding table games to our product offering.”
The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on June 10, 2010 to shareholders of record at the close of business on May 10, 2010.
* * *
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, multi-player electronic table games and a new Race and Sports Book; 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, | |
| | 2010 | | 2009 | |
Revenues: | | | | | |
Gaming (1) | | $ | 51,696 | | $ | 54,903 | |
Other operating (2) | | 4,354 | | 4,177 | |
| | 56,050 | | 59,080 | |
Expenses: | | | | | |
Gaming | | 43,972 | | 43,153 | |
Other operating | | 3,452 | | 3,343 | |
General and administrative | | 1,727 | | 1,730 | |
Depreciation | | 3,023 | | 2,948 | |
| | 52,174 | | 51,174 | |
| | | | | |
Operating earnings | | 3,876 | | 7,906 | |
| | | | | |
Interest expense | | 683 | | 637 | |
| | | | | |
Earnings before income taxes | | 3,193 | | 7,269 | |
| | | | | |
Income taxes | | 1,520 | | 2,976 | |
| | | | | |
Net earnings | | $ | 1,673 | | $ | 4,293 | |
| | | | | |
Net earnings per common share: | | | | | |
- Basic | | $ | 0.05 | | $ | 0.13 | |
- Diluted | | $ | 0.05 | | $ | 0.13 | |
| | | | | |
Weighted average shares outstanding: | | | | | |
- Basic | | 31,548 | | 31,485 | |
- Diluted | | 31,548 | | 31,485 | |
(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, | |
| | 2010 | | 2009 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash | | $ | 18,893 | | $ | 21,415 | |
Accounts receivable | | 3,717 | | 2,636 | |
Due from State of Delaware | | 3,297 | | 11,069 | |
Inventories | | 2,193 | | 2,170 | |
Prepaid expenses and other | | 2,397 | | 2,151 | |
Receivable from Dover Motorsports, Inc. | | 157 | | 5 | |
Income taxes receivable | | — | | 129 | |
Deferred income taxes | | 1,235 | | 1,209 | |
Total current assets | | 31,889 | | 40,784 | |
| | | | | |
Property and equipment, net | | 189,846 | | 192,360 | |
Other assets | | 892 | | 863 | |
Total assets | | $ | 222,627 | | $ | 234,007 | |
| | | | | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 3,745 | | $ | 3,078 | |
Purses due horsemen | | 3,369 | | 10,219 | |
Accrued liabilities | | 6,641 | | 8,788 | |
Income taxes payable | | 1,403 | | — | |
Deferred revenue | | 236 | | 306 | |
Total current liabilities | | 15,394 | | 22,391 | |
| | | | | |
Revolving line of credit | | 89,975 | | 95,125 | |
Liability for pension benefits | | 4,721 | | 4,900 | |
Other liabilities | | 468 | | 186 | |
Deferred income taxes | | 4,072 | | 4,166 | |
Total liabilities | | 114,630 | | 126,768 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 1,564 | | 1,546 | |
Class A common stock | | 1,660 | | 1,660 | |
Additional paid-in capital | | 1,856 | | 1,664 | |
Retained earnings | | 104,264 | | 103,559 | |
Accumulated other comprehensive loss | | (1,347 | ) | (1,190 | ) |
Total stockholders’ equity | | 107,997 | | 107,239 | |
Total liabilities and stockholders’ equity | | $ | 222,627 | | $ | 234,007 | |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | | $ | 1,673 | | $ | 4,293 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | |
Depreciation | | 3,023 | | 2,948 | |
Amortization of credit facility origination fees | | 16 | | 10 | |
Stock-based compensation | | 311 | | 238 | |
Deferred income taxes | | (230 | ) | 32 | |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | (1,081 | ) | (1,326 | ) |
Due from State of Delaware | | 7,772 | | 6,926 | |
Inventories | | (23 | ) | (79 | ) |
Prepaid expenses and other | | (288 | ) | (326 | ) |
Receivable from/payable to Dover Motorsports, Inc. | | (152 | ) | (16 | ) |
Accounts payable | | 667 | | 19 | |
Purses due horsemen | | (6,850 | ) | (7,054 | ) |
Accrued liabilities | | (2,147 | ) | 2,606 | |
Income taxes payable/receivable | | 1,750 | | 2,846 | |
Deferred revenue | | (70 | ) | 4 | |
Other liabilities | | (165 | ) | 20 | |
Net cash provided by operating activities | | 4,206 | | 11,141 | |
| | | | | |
Investing activities: | | | | | |
Capital expenditures | | (509 | ) | (1,918 | ) |
Net cash used in investing activities | | (509 | ) | (1,918 | ) |
| | | | | |
Financing activities: | | | | | |
Borrowings from revolving line of credit | | 33,000 | | 43,355 | |
Repayments of revolving line of credit | | (38,150 | ) | (52,180 | ) |
Dividends paid | | (968 | ) | (1,604 | ) |
Repurchase of common stock | | (101 | ) | (45 | ) |
Net cash used in financing activities | | (6,219 | ) | (10,474 | ) |
| | | | | |
Net decrease in cash | | (2,522 | ) | (1,251 | ) |
Cash, beginning of period | | 21,415 | | 17,889 | |
Cash, end of period | | $ | 18,893 | | $ | 16,638 | |
