Exhibit 99.1
FOR IMMEDIATE RELEASE |
| For further information, call: |
|
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, July 28, 2011 |
| (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2011
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2011.
The Company’s revenues for the second quarter of 2011 were $58,815,000 compared with $58,458,000 for the second quarter of 2010. Gaming revenues were $53,129,000 compared to $52,722,000 for the second quarter of last year, with the addition of table game revenue offset by lower slot win.
Gaming profits were lower compared to the second quarter of last year as a result of the lower slot win and from high gaming taxes, license fees and costs associated with table game operations.
Occupancy levels in the Dover Downs Hotel were approximately 91% for the second quarter of 2011 compared with approximately 85% last year.
Net earnings were $1,238,000, or $.04 per diluted share, compared with $2,277,000, or $.07 per diluted share for the second quarter of 2010.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “As we noted at the end of our first quarter, the new gaming taxes are crippling the gaming industry in Delaware. A more reasonable gaming tax is essential if gaming operators in Delaware are to remain competitive. We must allow for continued reinvestment in facilities, amenities and entertainment offerings and we must have sufficient funds to implement competitive marketing and promotional initiatives if we are to remain the preferred destination for gaming patrons in a region with an ever growing number of new facilities all vying for the same customers. While our company’s market share in Delaware is increasing, the total Delaware pie is shrinking — a trend we need to reverse for the benefit of all stakeholders in Delaware’s gaming industry, including the State. This is something that we are intently focused on and hope to address with State Administration officials in the coming months.”
The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on September 10, 2011 to shareholders of record at the close of business on August 10, 2011.
* * *
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 2,600 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 35,000 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 EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30, |
| June 30, |
| ||||||||
|
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Gaming (1) |
| $ | 53,129 |
| $ | 52,722 |
| $ | 107,461 |
| $ | 104,418 |
|
Other operating (2) |
| 5,686 |
| 5,736 |
| 10,760 |
| 10,090 |
| ||||
|
| 58,815 |
| 58,458 |
| 118,221 |
| 114,508 |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Gaming |
| 47,229 |
| 44,829 |
| 96,706 |
| 88,801 |
| ||||
Other operating |
| 4,176 |
| 4,347 |
| 8,049 |
| 7,799 |
| ||||
General and administrative |
| 1,614 |
| 1,706 |
| 3,393 |
| 3,433 |
| ||||
Depreciation |
| 2,901 |
| 2,823 |
| 6,045 |
| 5,846 |
| ||||
|
| 55,920 |
| 53,705 |
| 114,193 |
| 105,879 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating earnings |
| 2,895 |
| 4,753 |
| 4,028 |
| 8,629 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss on extinguishment of debt |
| 45 |
| — |
| 45 |
| — |
| ||||
Interest expense |
| 790 |
| 876 |
| 1,601 |
| 1,559 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings before income taxes |
| 2,060 |
| 3,877 |
| 2,382 |
| 7,070 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income taxes |
| 822 |
| 1,600 |
| 1,182 |
| 3,120 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net earnings |
| $ | 1,238 |
| $ | 2,277 |
| $ | 1,200 |
| $ | 3,950 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net earnings per common share: |
|
|
|
|
|
|
|
|
| ||||
- Basic |
| $ | 0.04 |
| $ | 0.07 |
| $ | 0.04 |
| $ | 0.12 |
|
- Diluted |
| $ | 0.04 |
| $ | 0.07 |
| $ | 0.04 |
| $ | 0.12 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
- Basic |
| 31,646 |
| 31,555 |
| 31,645 |
| 31,551 |
| ||||
- Diluted |
| 31,646 |
| 31,555 |
| 31,645 |
| 31,551 |
| ||||
(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.
(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)
|
| June 30, |
| December 31, |
| ||
|
| 2011 |
| 2010 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash |
| $ | 13,709 |
| $ | 18,819 |
|
Accounts receivable |
| 1,691 |
| 3,098 |
| ||
Due from State of Delaware |
| 4,800 |
| 9,829 |
| ||
Inventories |
| 2,104 |
| 1,989 |
| ||
Prepaid expenses and other |
| 5,170 |
| 2,551 |
| ||
Receivable from Dover Motorsports, Inc. |
| 4 |
| 18 |
| ||
Prepaid income taxes |
| 738 |
| 617 |
| ||
Deferred income taxes |
| 1,416 |
| 1,349 |
| ||
Total current assets |
| 29,632 |
| 38,270 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 181,141 |
| 186,227 |
| ||
Other assets |
| 974 |
| 789 |
| ||
Total assets |
| $ | 211,747 |
| $ | 225,286 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 3,203 |
| $ | 3,742 |
|
Purses due horsemen |
| 4,817 |
| 9,829 |
| ||
Accrued liabilities |
| 7,287 |
| 12,286 |
| ||
Deferred revenue |
| 307 |
| 307 |
| ||
Total current liabilities |
| 15,614 |
| 26,164 |
| ||
|
|
|
|
|
| ||
Revolving line of credit |
| 75,100 |
| 78,600 |
| ||
Liability for pension benefits |
| 3,091 |
| 4,949 |
| ||
Other liabilities |
| 408 |
| 598 |
| ||
Deferred income taxes |
| 5,630 |
| 4,224 |
| ||
Total liabilities |
| 99,843 |
| 114,535 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 1,580 |
| 1,564 |
| ||
Class A common stock |
| 1,660 |
| 1,660 |
| ||
Additional paid-in capital |
| 3,073 |
| 2,721 |
| ||
Retained earnings |
| 105,875 |
| 106,432 |
| ||
Accumulated other comprehensive loss |
| (284 | ) | (1,626 | ) | ||
Total stockholders’ equity |
| 111,904 |
| 110,751 |
| ||
Total liabilities and stockholders’ equity |
| $ | 211,747 |
| $ | 225,286 |
|
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Six Months Ended |
| ||||
|
| June 30, |
| ||||
|
| 2011 |
| 2010 |
| ||
|
|
|
|
|
| ||
Operating activities: |
|
|
|
|
| ||
Net earnings |
| $ | 1,200 |
| $ | 3,950 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation |
| 6,045 |
| 5,846 |
| ||
Amortization of credit facility origination fees |
| 44 |
| 34 |
| ||
Stock-based compensation |
| 518 |
| 609 |
| ||
Deferred income taxes |
| 188 |
| (572 | ) | ||
Loss on extinguishment of debt |
| 45 |
| — |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| 1,407 |
| (422 | ) | ||
Due from State of Delaware |
| 5,029 |
| 5,335 |
| ||
Inventories |
| (115 | ) | (36 | ) | ||
Prepaid expenses and other |
| (2,548 | ) | 79 |
| ||
Receivable from Dover Motorsports, Inc. |
| 14 |
| (3 | ) | ||
Prepaid income taxes/income taxes payable |
| (12 | ) | 369 |
| ||
Accounts payable |
| (228 | ) | (361 | ) | ||
Purses due horsemen |
| (5,012 | ) | (4,462 | ) | ||
Accrued liabilities |
| (4,999 | ) | (1,479 | ) | ||
Deferred revenue |
| — |
| (85 | ) | ||
Other liabilities |
| 209 |
| 68 |
| ||
Net cash provided by operating activities |
| 1,785 |
| 8,870 |
| ||
|
|
|
|
|
| ||
Investing activities: |
|
|
|
|
| ||
Capital expenditures |
| (959 | ) | (2,198 | ) | ||
Proceeds from sale of available-for-sale securities |
| 21 |
| 41 |
| ||
Purchase of available-for-sale securities |
| (95 | ) | (42 | ) | ||
Net cash used in investing activities |
| (1,033 | ) | (2,199 | ) | ||
|
|
|
|
|
| ||
Financing activities: |
|
|
|
|
| ||
Borrowings from revolving line of credit |
| 154,577 |
| 49,985 |
| ||
Repayments of revolving line of credit |
| (158,077 | ) | (60,085 | ) | ||
Dividends paid |
| (1,944 | ) | (1,936 | ) | ||
Repurchase of common stock |
| (150 | ) | (117 | ) | ||
Credit facility fees |
| (268 | ) | — |
| ||
Net cash used in financing activities |
| (5,862 | ) | (12,153 | ) | ||
|
|
|
|
|
| ||
Net decrease in cash |
| (5,110 | ) | (5,482 | ) | ||
Cash, beginning of period |
| 18,819 |
| 21,415 |
| ||
Cash, end of period |
| $ | 13,709 |
| $ | 15,933 |
|