Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, October 27, 2011 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2011
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the three months ended September 30, 2011.
Gaming revenues of $54,935,000 were down 8.3% compared to the third quarter of 2010. Lower slot win was offset to some extent by higher table game revenue for the quarter. Hurricane Irene forced the closure of the Company’s facility for almost an entire weekend in August contributing to the decline.
Other operating revenues of $5,167,000 were down 10.4% compared to the third quarter of 2010. The majority of that decline is related to the catering services provided to Dover Motorsports for their NASCAR weekend which was held in the fourth quarter of this year as compared to the third quarter of last year. Occupancy levels in the Dover Downs Hotel were approximately 95% for the third quarter of both years.
General and administrative costs were $1,461,000 compared with $1,912,000 in the third quarter of last year. The decline was related to cost savings from the freezing of the Company’s defined benefit pension plan and from legal and banking costs that were incurred in the third quarter last year.
Interest expense decreased $214,000 during the quarter as a result of lower average outstanding borrowings and lower interest rates.
Net earnings were $2,039,000, or $.06 per diluted share compared with $2,292,000 or $.07 per diluted share for the third quarter of 2010.
The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.03 per share. The dividend is payable on December 10, 2011 to shareholders of record at the close of business on November 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 |
| Nine Months Ended |
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|
| September 30, |
| September 30, |
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|
| 2011 |
| 2010 |
| 2011 |
| 2010 |
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Revenues: |
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|
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Gaming (1) |
| $ | 54,935 |
| $ | 59,934 |
| $ | 162,396 |
| $ | 164,352 |
|
Other operating (2) |
| 5,167 |
| 5,766 |
| 15,927 |
| 15,856 |
| ||||
|
| 60,102 |
| 65,700 |
| 178,323 |
| 180,208 |
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Expenses: |
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|
|
|
|
|
|
|
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Gaming |
| 48,218 |
| 51,696 |
| 144,924 |
| 140,497 |
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Other operating |
| 3,676 |
| 4,490 |
| 11,725 |
| 12,289 |
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General and administrative |
| 1,461 |
| 1,912 |
| 4,854 |
| 5,345 |
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Depreciation |
| 2,823 |
| 3,103 |
| 8,868 |
| 8,949 |
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|
| 56,178 |
| 61,201 |
| 170,371 |
| 167,080 |
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Operating earnings |
| 3,924 |
| 4,499 |
| 7,952 |
| 13,128 |
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|
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Loss on extinguishment of debt |
| — |
| — |
| 45 |
| — |
| ||||
Interest expense |
| 646 |
| 860 |
| 2,247 |
| 2,419 |
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|
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|
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Earnings before income taxes |
| 3,278 |
| 3,639 |
| 5,660 |
| 10,709 |
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Income taxes |
| 1,239 |
| 1,347 |
| 2,421 |
| 4,467 |
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Net earnings |
| $ | 2,039 |
| $ | 2,292 |
| $ | 3,239 |
| $ | 6,242 |
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Net earnings per common share: |
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- Basic |
| $ | 0.06 |
| $ | 0.07 |
| $ | 0.10 |
| $ | 0.19 |
|
- Diluted |
| $ | 0.06 |
| $ | 0.07 |
| $ | 0.10 |
| $ | 0.19 |
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Weighted average shares outstanding: |
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- Basic |
| 31,646 |
| 31,558 |
| 31,645 |
| 31,554 |
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- Diluted |
| 31,646 |
| 31,558 |
| 31,645 |
| 31,554 |
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(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. |
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(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)
|
| September 30, |
| December 31, |
| ||
|
| 2011 |
| 2010 |
| ||
ASSETS |
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| ||
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Current assets: |
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Cash |
| $ | 16,026 |
| $ | 18,819 |
|
Accounts receivable |
| 1,984 |
| 3,098 |
| ||
Due from State of Delaware |
| 10,252 |
| 9,829 |
| ||
Inventories |
| 2,204 |
| 1,989 |
| ||
Prepaid expenses and other |
| 4,512 |
| 2,551 |
| ||
Receivable from Dover Motorsports, Inc. |
| 4 |
| 18 |
| ||
Prepaid income taxes |
| 511 |
| 617 |
| ||
Deferred income taxes |
| 1,321 |
| 1,349 |
| ||
Total current assets |
| 36,814 |
| 38,270 |
| ||
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|
|
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Property and equipment, net |
| 178,797 |
| 186,227 |
| ||
Other assets |
| 904 |
| 789 |
| ||
Total assets |
| $ | 216,515 |
| $ | 225,286 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 4,514 |
| $ | 3,742 |
|
Purses due horsemen |
| 10,260 |
| 9,829 |
| ||
Accrued liabilities |
| 8,310 |
| 12,286 |
| ||
Deferred revenue |
| 265 |
| 307 |
| ||
Total current liabilities |
| 23,349 |
| 26,164 |
| ||
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Revolving line of credit |
| 71,515 |
| 78,600 |
| ||
Liability for pension benefits |
| 2,470 |
| 4,949 |
| ||
Other liabilities |
| 271 |
| 598 |
| ||
Deferred income taxes |
| 5,645 |
| 4,224 |
| ||
Total liabilities |
| 103,250 |
| 114,535 |
| ||
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Stockholders’ equity: |
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Common stock |
| 1,580 |
| 1,564 |
| ||
Class A common stock |
| 1,660 |
| 1,660 |
| ||
Additional paid-in capital |
| 3,300 |
| 2,721 |
| ||
Retained earnings |
| 106,942 |
| 106,432 |
| ||
Accumulated other comprehensive loss |
| (217 | ) | (1,626 | ) | ||
Total stockholders’ equity |
| 113,265 |
| 110,751 |
| ||
Total liabilities and stockholders’ equity |
| $ | 216,515 |
| $ | 225,286 |
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Nine Months Ended |
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|
| September 30, |
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|
| 2011 |
| 2010 |
| ||
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Operating activities: |
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|
|
| ||
Net earnings |
| $ | 3,239 |
| $ | 6,242 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
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|
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Depreciation |
| 8,868 |
| 8,949 |
| ||
Amortization of credit facility origination fees |
| 67 |
| 53 |
| ||
Stock-based compensation |
| 745 |
| 901 |
| ||
Deferred income taxes |
| 320 |
| (385 | ) | ||
Loss on extinguishment of debt |
| 45 |
| — |
| ||
Changes in assets and liabilities: |
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|
|
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| ||
Accounts receivable |
| 1,114 |
| 712 |
| ||
Due from State of Delaware |
| (423 | ) | (698 | ) | ||
Inventories |
| (215 | ) | (334 | ) | ||
Prepaid expenses and other |
| (1,865 | ) | (881 | ) | ||
Receivable from Dover Motorsports, Inc. |
| 14 |
| (35 | ) | ||
Prepaid income taxes |
| 146 |
| (172 | ) | ||
Accounts payable |
| 1,083 |
| 560 |
| ||
Purses due horsemen |
| 431 |
| 1,565 |
| ||
Accrued liabilities |
| (3,976 | ) | 187 |
| ||
Deferred revenue |
| (42 | ) | (46 | ) | ||
Other liabilities |
| (412 | ) | (499 | ) | ||
Net cash provided by operating activities |
| 9,139 |
| 16,119 |
| ||
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Investing activities: |
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Capital expenditures |
| (1,438 | ) | (4,556 | ) | ||
Proceeds from sale of available-for-sale securities |
| 127 |
| 46 |
| ||
Purchase of available-for-sale securities |
| (202 | ) | (48 | ) | ||
Net cash used in investing activities |
| (1,513 | ) | (4,558 | ) | ||
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Financing activities: |
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Borrowings from revolving line of credit |
| 168,943 |
| 90,585 |
| ||
Repayments of revolving line of credit |
| (176,028 | ) | (103,610 | ) | ||
Dividends paid |
| (2,916 | ) | (2,903 | ) | ||
Repurchase of common stock |
| (150 | ) | (117 | ) | ||
Credit facility fees |
| (268 | ) | — |
| ||
Net cash used in financing activities |
| (10,419 | ) | (16,045 | ) | ||
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Net decrease in cash |
| (2,793 | ) | (4,484 | ) | ||
Cash, beginning of period |
| 18,819 |
| 21,415 |
| ||
Cash, end of period |
| $ | 16,026 |
| $ | 16,931 |
|